In an Aggregate Expenditures Diagram, Equal Increases in Government Spending

question 190

Multiple Choice

In an aggregate expenditures diagram, equal increases in government spending and in lump-sum taxes will

• A)shift the aggregate expenditures line downward.
• B)shift the aggregate expenditures line upward.
• C)leave the aggregate expenditures line unchanged.
• D)reduce the equilibrium GDP.

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Definitions:

Relative Distribution

A measure of how income or wealth is shared among individuals or groups within a society.

Income

A flow of money to households.

Poverty Rate

The percentage of the population that lives below the national poverty line, indicating the proportion of the population living in poverty.

Hispanics

People from, or descendants of, Spanish-speaking populations, primarily found in Latin America and the United States.