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:

Probability Distribution

A mathematical formula that calculates the likelihoods of various potential results for an experiment.

Standard Deviation

A statistical measure of the dispersion or variation in a set of values, indicating how much individual data points differ from the mean.

Post-Secondary Institute

An educational institution that offers studies beyond the secondary level, such as colleges and universities.

Probability Distribution

A statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.