When the Government Cuts Spending, Aggregate Demand Will Fall, This

question 30

True/False

When the government cuts spending, aggregate demand will fall, this will depress production and employment in the short run

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Definitions:

Marginal Cost

The escalation of full cost associated with manufacturing an additional unit of a good or service.

Output

The amount of products or services that a company, sector, or nation generates over a specific period of time.

Total Fixed Cost

The sum of all costs that do not change with the level of output, even if that output is zero.

Output Level

The quantity of goods or services produced by a firm or industry at a given time.