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:

Main Source

is the primary origin or initial supplier of information, goods, or services.

Revenue

The total amount of income generated by the sale of goods or services related to a company's primary operations.

Federal Government

The national government of a federal state, which operates in conjunction with regional governments.

Fiscal Policy

Government policy regarding taxation and spending to influence the economy.