An Increase in Government Purchases Will Increase Aggregate Demand Because

question 116

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.
• E)increases in government purchases cause an increase in aggregate supply.

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Definitions:

Operant Conditioning

An approach to behavior modification that relies on the leveraging of rewards or the infliction of punishments to adjust behavior levels.

Token Economy

A behavior modification system that utilizes tokens as a form of currency for positive behaviors, which can later be exchanged for desired rewards or privileges.

Systematic Desensitization

A type of behavioral therapy used to gradually reduce phobic reactions and anxiety through counterconditioning.

Cognitive Therapy

A form of psychotherapy that focuses on changing unhelpful or unhealthy thought patterns that contribute to emotional distress and mental health issues.