An Increase in Government Purchases Will Increase Aggregate Demand Because

question 45

Multiple Choice

An increase in government purchases will increase aggregate demand because

• A)government expenditures are a component of aggregate demand.
• B)consumption expenditures are a component of aggregate demand.
• C)the decline in the price level will increase demand.
• D)the decline in the interest rate will increase demand.

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Definitions:

Slope

The slope represents the rate of change between two variables on a graph, indicating how much one variable changes for a unit change in another variable.

Criterion Variable

The dependent variable in a study that is predicted or explained by the independent variable(s).

Predictor Variable

An independent variable in statistical models that is used to predict or explain changes in the dependent variable (response variable).

Nominal Variable

A nominal variable is a type of categorical variable for which there is no natural ordering among the categories.