A Change in Government Purchases Has the Greatest Effect on the Economy

question 59

Multiple Choice

A change in government purchases has the greatest effect on the economy in the short run when _____.

• A)the aggregate demand curve is relatively flat.
• B)the aggregate demand curve is relatively steep.
• C)the short-run aggregate supply curve is relatively flat.
• D)the aggregate demand curve is vertical.
• E)the short-run aggregate supply curve is vertical.

---

Definitions:

Service Business

A service business is a type of business that provides intangible products or services to customers, as opposed to selling physical goods.

Tax Preparation

The process of compiling and filing income tax returns in compliance with legal requirements, often involving the calculation of taxes owed or refundable.

Merchandising Business

A business that purchases finished goods for resale, making a profit on the difference between buying and selling prices.

Men's Clothing Store

A retail establishment specializing in selling apparel and accessories targeted at the male demographic.