Other things being equal,a decrease in government spending growth causes:
A) the AD curve to shift to the right.
B) the AD curve to shift to the left.
C) the LRAS curve to shift to the right.
D) the LRAS curve to shift to the left.

Question

Quizplus · Accepted Answer

A decrease in government spending growth would mean less government spending, which leads to a decrease in aggregate demand (AD). This is because there will be less money circulating in the economy, resulting in decreased consumer spending and investment. Therefore, the AD curve will shift to the left.

Other Things Being Equal,a Decrease in Government Spending Growth Causes