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jarptica [38.1K]
3 years ago
5

Other things the same, when the government spends more, the initial effect is that a. aggregate demand shifts right. b. aggregat

e demand shifts left. c. aggregate supply shifts right. d. aggregate supply shifts left.
Business
1 answer:
tatyana61 [14]3 years ago
4 0

Answer: Option (a) is correct.

Explanation:

Correct option: Aggregate demand shifts right.

Aggregate demand = consumption + government spending + Investment + Net Exports

Other things remains constant, if there is an increase in the government spending, as a result aggregate demand curve shifts rightwards. This will lead to increase the price level and level of output.

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