If the AS Curve Is Upward-Sloping,the Government Alone Should Raise

question 85

True/False

If the AS curve is upward-sloping,the government alone should raise its purchases by the amount of the AD shortfall in order to reach full-employment equilibrium.
As long as the AS curve slopes upward,the aggregate demand must increase by more than the size of the recessionary GDP gap in order to achieve full employment.However,it is not necessary for the government to make up the entire shortfall in aggregate demand.Every dollar of new autonomous government spending has a multiplied impact on induced aggregate demand.

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Definitions:

Control

In a business context, it refers to the process of monitoring activities to ensure they are being accomplished as planned and correcting any significant deviations.

Constraint

A limitation or restriction that influences or hampers the ability to perform an action or achieve a goal.

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Furniture items made primarily of copper, known for their aesthetic appeal and durability.

Price Increase

The act of raising the cost of goods or services that a company sells.