Register
Other things the same, when the government spends more, the initial effect is that a. aggregate demand shifts right. b. aggregate demand shifts left. c. aggregate supply shifts right. d. aggregate supply
177k views
1 vote
Other things the same, when the government spends more, the initial effect is that a. aggregate demand shifts right. b. aggregate demand shifts left. c. aggregate supply shifts right. d. aggregate supply shifts left.

User Nevine
by
5.1k points

1 Answer

4 votes

Answer: Option (a) is correct.

Step-by-step explanation:

Correct option: Aggregate demand shifts right.

Aggregate demand = consumption + government spending + Investment + Net Exports

Other things remains constant, if there is an increase in the government spending, as a result aggregate demand curve shifts rightwards. This will lead to increase the price level and level of output.

User Kareemostafa
by
5.6k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.6m questions

7.3m answers

Other Questions

On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
How do i figure out a months ending capital
Link Copied!