Suppose as a reaction to terrorist attacks the U.S. government were to create a new branch of the military employing 1,000,000 new service men and women to monitor malls, large sporting events, and infrastructure (bridges, dams, refineries, etc.)Hiring and paying these people would likely
A)increase aggregate demand.
B)increase aggregate supply.
C)decrease aggregate demand.
D)decrease aggregate supply.

Question

Quizplus · Accepted Answer

Hiring 1,000,000 new service men and women would increase aggregate demand as there would be an increase in government spending and the employees would have additional income to spend, leading to an increase in overall demand for goods and services.

Suppose as a Reaction to Terrorist Attacks the U