Which of the following circumstances will shift AD to the right,other things being equal?
A)when the government budget surplus decreases because transfer payments fell
B)when the government budget surplus increases because taxes rose
C)when the government budget surplus decreases because government purchases rose
D)when the government budget surplus increases because government purchases rose

Question

Quizplus · Accepted Answer

When government purchases increase, it stimulates demand by increasing aggregate expenditure. Thus, an increase in government purchases will shift the aggregate demand (AD) curve to the right.

Which of the Following Circumstances Will Shift AD to the Right,other