Question

Suppose the economy is in long-run equilibrium. if the government increases its expenditures, eventually the increase in aggregate demand causes price expectations to?

Answer 1

The increase in aggregate demand causes price expectations to rise.

An economy is a place of manufacturing, distribution, and alternate, in addition to intake of goods and offerings. In standard, it is described as a social domain that emphasizes the practices, discourses, and fabric expressions related to the production, use, and management of scarce resources.

Expenditure is the act or technique of expending.

Aggregate demand or a home's very last demand is the whole call for the very last items and offerings in a financial system at a given time. It is regularly referred to as effective demand, even though at other times this time period is outstanding. this is the call for the gross domestic made from a country.

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