If the expansionary effect of additional government expenditure ________ the contractionary effect of the fall in private investment,the labor demand curve ________.
A) exceeds; will shift to the left
B) exceeds; will remain unchanged
C) equals; will shift to the right
D) equals; will remain at its initial position

Question

Quizplus · Accepted Answer

When the expansionary effect of additional government expenditure equals the contractionary effect of the fall in private investment, the overall impact on the economy is neutral, meaning there is no net change in demand for labor, so the labor demand curve will remain at its initial position.

If the Expansionary Effect of Additional Government Expenditure ________ the Contractionary