What is the relationship in the growth rate of output and government spending in the graph? FREDGross Domestic Product by Expenditure in Constant Prices: Government Final Consumption Expenditure for FranceReal Gross Domestic Product for France-2-31985199019952000200520102015Sources: OECD, Eurostatfred.stlouisfed.orgPercent Change from Year Ago

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What is the relationship in the growth rate of output and government spending in the graph?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

What is the relationship in the growth rate of output and government spending in the graph?

FRED
Gross Domestic Product by Expenditure in Constant Prices: Government Final Consumption Expenditure for France
Real Gross Domestic Product for France
-2
-3
1985
1990
1995
2000
2005
2010
2015
Sources: OECD, Eurostat
fred.stlouisfed.org
Percent Change from Year Ago

Expert Solution

Step 1

The relationship between the growth output and the government spending is such that a shock to the growth output can lead to an increased government spending in the economy of France.

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