Suppose That Government Spending on Defense Rises by $50 Billion

question 98

Multiple Choice

Suppose that government spending on defense rises by $50 billion.What happens to the aggregate demand curve?

• A)It shifts right by $50 billion at each price level.
• B)It shifts right by more than $50 billion at each price level.
• C)It shifts right by less than $50 billion at each price level.
• D)The aggregate demand does not shift; the aggregate supply curve shifts right by $50 billion at each price level.

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