In a Binding Situation,an Increase in Government Spending

question 49

Multiple Choice

In a binding situation,an increase in government spending

• A) shifts the AD curve to the right.
• B) shifts the AD curve to the left.
• C) does not shift the AD curve.
• D) causes the AD curve to become horizontal.

---

Definitions:

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Dividends Paid

Cash or other assets distributed to shareholders out of the company's earnings.

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period of time, leading to net income or net loss.

GAAP

Generally Accepted Accounting Principles; a set of accounting standards, principles, and procedures that companies must follow when compiling their financial statements in the U.S.