In a closed economy with only lump-sum taxation, if the MPC is equal to 0.75, a $70 billion increase in government spending could cause a maximum increase in output of A) $ 52.5 billion B) $70 billion C) $122.5 billion D) $210 billion E) $280 billion They may not have enough skilled workers to make it. The increase in savings came as spending declined by a record 13.6% in April. from changes in direct taxes and state welfare payments; Level of and changes in employment & job security; Availability and cost of consumer credit – affects willingness to borrow; Costofservicing a mortgage (i.e. reduced employment levels. Increased consumer spending will usually cause: (Points : 1) lower consumer prices. ... c. usually causes businesses to lower production ... characteristics: high GDP, high consumer confidence and spending, high demand, high inflation, low unemployment Possible government responses: Economic expansion has a direct impact on the level of consumer spending in an economy, which can lead to a high demand for products and services. B . D . Decreased consumer spending will usually cause . lower consumer prices . Answer to p . Changes in real disposable incomes (Yd) for households e.g. If the above data is accurate, then all of the government spending that could be considered consumer-stimulative carried out to date amounts to only 93.1% of the lost income from COVID-19. The main cause of unemployment is reduced demand for the goods and services being provided by various workers. C . Producers can't make enough to meet demand. Key factors influencing consumer spending. lower interest rates. If government spending causes the unemployed to gain jobs, then they will have more income to spend leading to a further increase in aggregate demand. lower tax revenues . 15 Increased consumer spending will usually cause : A . higher employment levels. reduced employment levels . reduced employment levels . construction workers employed by government increase spending in pubs and transport, causing other sectors of the economy to benefit from the government spending). It occurs when consumer demand for goods and services increases so much that it outstrips supply. They may not have time to build the manufacturing needed to boost supply. (e.g. lower tax revenues. View Test Prep - 8.jpg from FINANCE ADM 3445 at University of New Brunswick. U.S. consumers have amassed savings as the deadly coronavirus causes unprecedented economic and societal disruption. Demand-pull inflation is the most common cause of rising prices. 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