When Government Spending Is Added to Consumption and Planned Investment

question 97

True/False

When government spending is added to consumption and planned investment, the slope of the aggregate expenditure function increases.

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Definitions:

Opportunity Cost

The exclusion of favorable outcomes from different choices upon selecting one option.

Increasing Opportunity Cost

A scenario where choosing more of one option increasingly limits the ability to choose other options, demonstrating the trade-offs in resource allocation.

Straight Line

A direct path between two points in a plane or three-dimensional space, having no curvature.

Opportunity Costs

The expense of the best alternative given up to make a choice.