In the Aggregate Expenditures Model, an Increase in Government Spending

question 237

Multiple Choice

In the aggregate expenditures model, an increase in government spending will:

• A)decrease real GDP.
• B)increase output and employment.
• C)shift the aggregate expenditures schedule downward.
• D)do all of the above.

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Definitions:

Assumptions

Statements or ideas accepted as true without proof, used as the basis for reasoning or argumentation.

Explanandum

The phenomenon or event that is to be explained, often used in the context of scientific inquiry.

Hypothesis

A proposed explanation for a phenomenon, often based on limited evidence as a starting point for further investigation.

Plausible

Appearing likely or probable, often based on circumstantial evidence or logical reasoning, but not confirmed.