When the Government Spends More, What Is the Initial Effect

question 247

Multiple Choice

When the government spends more, what is the initial effect?

• A) Aggregate demand shifts right.
• B) Aggregate demand shifts left.
• C) Aggregate supply shifts right.
• D) Aggregate supply shifts left.

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Definitions:

Basis

The initial value of an asset for tax purposes, used to calculate depreciation, amortization, and determines the gain or loss on the asset's sale.

Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the company's assets and earnings.

Fiscal Year-End

The last day of a company's accounting period, which is used for financial reporting and tax purposes, and can vary between organizations.

Automatic Extension

A provision allowing taxpayers to automatically extend their deadline for submitting tax returns or other required documents, without needing to provide a reason.