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6 November, 22:21

If President Trump increases military spending to take a stronger stance against Iran, then ceteris paribus, we would expect the US economy's output to O increase double decrease O be unaffected

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  1. 6 November, 22:31
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    The correct answer is letter "C": decrease.

    Explanation:

    Usually, military spending tends to slow economic growth since it discourages private investment which at the same time causes employment rates to drop. According to different researches, it is said that only a 1% increase in military spending could lead to up to 9% of economic growth decrease.
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