Government spending (G)
What will be an ideal response?
the component of GDP that represents spending on goods and services by federal, state and local government. on goods and services, including spending by federal, state, and local governments (G) is added to aggregate demand (AD). Taxes do not appear directly in this equation, but, as we will see, they have an impact through their effect on consumption spending.
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Inflation is defined as
a. a period of rising productivity in the economy. b. a period of rising income in the economy. c. an increase in the overall level of output in the economy. d. an increase in the overall level of prices in the economy.
Assume that the current price of a market basket of goods is $5,000 and the base year price of the same market basket is $4,000. The current price index is
A. 125. B. 400. C. 2500. D. 200.