Other things the same,when the government spends more,the initial effect is that
A)aggregate demand shifts right.
B)aggregate demand shifts left.
C)aggregate supply shifts right.
D)aggregate supply shifts left.

Question

Quizplus · Accepted Answer

When the government spends more, it injects more money into the economy which increases the aggregate demand. This shift in demand will cause the economy to grow, which will increase GDP and potentially decrease unemployment. Therefore, choice A is correct.

Other Things the Same,when the Government Spends More,the Initial Effect