When fiscal stimulus is used to address a decrease in $\vec { C }$ that causes a reduction in AD, the increase in government spending must be the same size as the change in $\vec { C }$
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Question

Quizplus · Accepted Answer

Fiscal stimulus does not need to match the decrease in consumption exactly because of the multiplier effect, where an initial increase in spending leads to a larger overall increase in aggregate demand.

When Fiscal Stimulus Is Used to Address a Decrease In \vec