Question

"As a result of the increase in government​ expenditures, the" A. money supply curve will shift right. B. money supply curve will shift left. C. money demand curve will shift right. D. money demand curve will shift left.

Answer 1

Answer:

A. money supply curve will shift right.

Explanation: when the supply of money is increase by the central bank,the money supply curve will shift right. Leading to a lower interest rate,but,the money supply curve shifts left, when the supply of money falls,which leads to higher interest rate.

Answer 2

Answer:

The answer is option C) "As a result of the increase in government​ expenditures, the money demand curve will shift right

Explanation:

Increased government spending is likely to cause a rise in aggregate demand (AD). This can lead to higher growth in the short-term. It can also potentially lead to inflation.

Higher government spending has a tremendous impact on the economy.

If successfully targeted on improving skills and education, government spending can increase labor productivity and enable higher long-term economic growth.

If spending is focused on welfare benefits or pensions, it may reduce inequality, but it could crowd out more productive private sector investment.