Question

An example of the multiplier effect is when: Group of answer choices an increase in government spending leads to a decrease in private investment. the government increases government spending initially by $100 billion, and total income in the economy increases by more than $100 billion. short-run aggregate supply shifts in a response to fiscal policy. an increase in the price level leads to a shift in the aggregate demand curve. the government increases government spending initially by $100 billion, and total income in the economy increases by less than $100 billion.

Answer 1

the government increases government spending initially by $100 billion, and total income in the economy increases by more than $100 billion.

Step-by-step explanation:

When there is a rise in the government spending so it would rise the income i.e. higher that this represents the multiplier effect

If there is a rise in government spending so the Aggregate demand curve should be right due to which the income and level of the price would rise

Also if there is any change in the price level that moves along with the similar curve so this we cant called as the multiplier effect

hence, the above represent the answer