The initial impact of an increase in government spending is to shift
A. aggregate supply to the right.
B. aggregate demand to the left.
C. aggregate demand to the right.
D. aggregate supply to the left.
Answer: C. aggregate demand to the right.
Economics
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Contractionary policies are government policies that
A) decrease aggregate supply. B) increase aggregate supply. C) increase aggregate demand. D) decrease aggregate demand.
Economics
Using the Taylor rule, if the current inflation rate exceeds the target inflation rate and real GDP exceeds potential GDP, then the federal funds target rate ________ the sum of the current inflation rate plus the real equilibrium federal funds rate
A) may be greater than or less than B) will be greater than C) will be the same as D) will be less than
Economics