If the US Government Increases Its Expenditures (Without Any Change in Taxes)and

question 16

Multiple Choice

If the U.S. government increases its expenditures (without any change in taxes) and at the same time the Federal Reserve Bank increases the money supply, the AD curve would:

• A)shift to the left.
• B)shift to the right.
• C)become flatter.
• D)become steeper.

---

Definitions:

Initial Investments

The upfront sum of money invested in a project, business, or asset to start its operation.

Income Taxes

Taxes imposed by governments on the income generated by businesses and individuals within their jurisdiction.

Income Tax Expense

The total amount of income tax a company is obligated to pay to the government, reported as an expense in the income statement.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income, which can vary based on income level, jurisdiction, and other factors.