What Would Happen to Aggregate Demand (AD)if the Federal Government

question 60

Multiple Choice

What would happen to aggregate demand (AD) if the federal government increased military purchases and provincial and local governments decreased their road building budgets at the same time?

• A)AD would increase, because only federal government purchases affect AD.
• B)AD would increase if the change in federal purchases were smaller than the change in provincial and local purchases.
• C)AD would decrease, because only provincial and local government purchases affect AD.
• D)AD would decrease if the change in federal purchases were smaller than the change in provincial and local purchases.

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Definitions:

Past History

Past history is a record or account of events, actions, or conditions that happened in the past.

Overt Behavior

Observable actions or responses of an individual, which can be directly seen and measured by others.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

Freudian Psychoanalysis

A psychological theory and therapy method developed by Sigmund Freud that emphasizes unconscious motivations and conflicts as determinants of human behavior.