A big increase in government spending is an example of a positive demand shock.
A demand shock is a sudden event that increases or decreases demand for goods or services temporarily. A positive demand shock increases aggregate demand and a negative demand shock decreases aggregate demand. Therefore there will be an initial inflation with the shock but since demand shocks are temporary and the central bank commits to an inflation rate target, then over time inflation will fall back down to the inflation target.
Expansionary fiscal policy is an increase in government spending or a decrease in taxation, while contractionary fiscal policy is a decrease in government spending or an increase in taxes. Expansionary fiscal policy can be used by governments to stimulate the economy during a recession.
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Answer:
Sampling error
Explanation:
This is probably due to sampling error. The sampling error has the likelihood of occuring when the statistician fails to select a sample that could be a representation of the full population. The sample results are not a true representation of the true results from the entire population.
the null hypothesis tells us that no significant difference exists between the populations chosen, and any difference can be as a result of sampling error.
Answer:
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Explanation:
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