Everything Else Held Constant,a Balanced Budget Increase in Government Spending

question 92

Multiple Choice

Everything else held constant,a balanced budget increase in government spending (that is,an increase in government spending that is matched by an identical increase in net taxes) will

• A)increase aggregate demand,but not by as much as if just government spending increases.
• B)increase aggregate demand by more than if just government spending increases.
• C)not affect aggregate demand.
• D)decrease aggregate demand.