Other things equal, an increase in government spending shifts
A) the AD curve to the left.
B) the AD curve to the right.
C) the AS curve to the left.
D) the AS curve to the right.

Question

Quizplus · Accepted Answer

An increase in government spending leads to an increase in aggregate demand (AD) as it increases the level of expenditures within the economy. Therefore, it would shift the AD curve to the right.

Other Things Equal, an Increase in Government Spending Shifts