The Government Increases the Level of Government Expenditure

question 54

Multiple Choice

The government increases the level of government expenditure. If there is no change in the aggregate supply curve, then aggregate demand will ________, real GDP will ________, and the price level will ________.

• A)increase; remain the same; increase
• B)remain the same; increase; increase
• C)increase; increase; increase
• D)decrease; increase; increase
• E)decrease; remain the same; decrease

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Definitions:

Economic Fluctuations

Variations in the level of economic activity, characterized by periods of economic growth and contraction.

Electoral Calendar

A schedule outlining the dates of significant electoral events, such as elections and referendums, across different jurisdictions.

Political Business Cycle

Economic fluctuations that result from the manipulation of fiscal and monetary policies for political gain.

Fed

Short for the Federal Reserve System, which is the central banking system of the United States, responsible for monetary policy, regulating banks, maintaining financial stability, and providing financial services.