Final answer:
According to Keynesian economics, an increase in government spending will lead to an increase in aggregate demand, which can cause higher output, lower unemployment, and possible inflationary pressures.
Step-by-step explanation:
According to Keynesians, an increase in government spending will result in an increase in aggregate demand. This is because government spending is one of the components that constitute aggregate demand, which also includes consumption, investment, and net exports. When the government spends more, it directly raises the demand for goods and services in the economy.
Keynesian economics posits that this increase in aggregate demand will lead to a rightward shift of the aggregate demand curve, potentially increasing both income and price levels in the short run. This can result in higher output and lower unemployment, but it may also lead to inflationary pressures if the economy is operating at or near potential output, where the aggregate supply curve becomes more inelastic.