When Government Spending Rises

question 228

Multiple Choice

When government spending rises

• A) aggregate demand rises.
• B) aggregate demand falls.
• C) the aggregate price level falls.
• D) it crowds out net exports.

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Definitions:

Marginal Cost

The elevation in full costs that come from generating an additional unit of a good or service.

Average Cost

The total cost divided by the number of goods produced, representing the per unit cost of production.

Market Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by all consumers in the market.

Monopoly

is a market structure characterized by a single seller, selling a unique product in the market without any direct competition.