An increase in government spending leads to a(n)
a. downward shift of the aggregate expenditure line and a leftward shift of the money demand curve
b. upward shift of the aggregate expenditure line and a rightward shift of the money demand curve
c. downward shift of the aggregate expenditure line and a rightward shift of the money demand curve
d. upward shift of the aggregate expenditure line and a leftward shift of the money demand curve
e. upward shift of the aggregate expenditure line but no shift of the money demand curve
B
You might also like to view...
How should a natural monopoly be regulated under the social interest theory of regulation?
A) by setting price equal to the average cost of production B) by allowing a price that maximizes the profit of the natural monopoly C) by using a marginal cost pricing rule D) by subsidizing other producers to compete with the monopoly E) by using rate of return regulation
Why does a new hardcover Stephen King novel have a higher price than the paperback edition?
A) It costs more to produce. B) The elasticity of demand differs. C) The publisher is more greedy when marketing the hardcover edition. D) The publisher is a price searcher on the hardcover editions and a price taker on the paperback editions.