A Change in Government Purchases Has the Greatest Effect on the Economy

question 59

Multiple Choice

A change in government purchases has the greatest effect on the economy in the short run when _____.

• A)the aggregate demand curve is relatively flat.
• B)the aggregate demand curve is relatively steep.
• C)the short-run aggregate supply curve is relatively flat.
• D)the aggregate demand curve is vertical.
• E)the short-run aggregate supply curve is vertical.

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Definitions:

Construction Cost

The total expenses incurred during the building of a structure, including materials, labor, and other related costs.

Operating Cost

Expenses associated with the day-to-day running of a business, excluding the cost of goods sold.

Soft Infrastructure

Non-physical infrastructure, including institutions, human capital, and societal systems that support economic activities.

Community Receptivity

The level of openness or acceptance that a community shows towards a new idea, product, or initiative.