Everything Else Held Constant,an Increase in Government Spending Will Cause

question 24

Multiple Choice

Everything else held constant,an increase in government spending will cause

• A)aggregate demand to increase.
• B)aggregate demand to decrease.
• C)the quantity of aggregate demand to increase.
• D)the quantity of aggregate demand to decrease.

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Definitions:

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price level, at a specific time.

Excess Demand

Occurs when the quantity demanded of a good or service at the current price exceeds the quantity supplied, often leading to upward pressure on prices.

Market Equilibrium

A state where the supply of goods matches demand, resulting in stable prices.

Market Equilibrium

Market Equilibrium is a state in which market supply equals market demand, meaning that goods supplied at a certain price are exactly matched by the goods demanded at that price.