Question

Suppose that the administration in charge of the government proposes increasing spending on infrastructure. Assume that everything else stays the same. The components of aggregate demand (AD) are consumption (C), investment (I), government purchases (G), and net exports (NX). Which component of AD is primarily affected

Answer 1

Answer:

Government purchases (G)

Explanation:

The aggregate demand refers to the total quantity of all goods and services demanded within a particular market at various prices.

If the administration in charge of the government proposes increasing spending on infrastructure such that everything else stays the same,

Government purchases (G) is primarily affected.