Question

The balanced budget multiplier applies when a $50 billion increase in government expenditure is financed by a $50 billion ________ in tax revenue and the balanced budget multiplier shows that in this case there is ________ effect on aggregate demand.

Answer 1

Increase; a positive

Step-by-step explanation:

An aggregate demand in economics terms is an economic measurement of the total amount of demand for all finished goods and services produced in an economy.

Aggregate demand is expressed as the total amount of money exchanged for those goods and service at a specific price level and point in time.