An Increase in Government Spending Shifts Aggregate Demand

question 81

Multiple Choice

An increase in government spending shifts aggregate demand

• A)to the right.The larger the multiplier is,the farther it shifts.
• B)to the right.The larger the multiplier is,the less it shifts.
• C)to the left.The larger the multiplier is,the farther it shifts.
• D)to the left.The larger the multiplier is,the less it shifts.

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Definitions:

Accounts Payable

Money owed by a company to its creditors for goods or services that have been delivered but not yet paid for.

Fair Value

The estimated market price of an asset or liability, based on current conditions and the willing buyer-seller principle.

Capital

The owner’s investment of equity in the company.

Debit

The left-hand side of any account. A number entered on the left side of any account is said to be debited to an account.