Ask Question
BusinessBusiness
31 July, 11:41

An increase in government spending initially and primarily shifts

a. aggregate demand to the right.

b. aggregate demand to the left.

c. aggregate supply to the right.

d. neither aggregate demand nor aggregate supply in either direction.

+4
Answers (1)
  1. 31 July, 15:38
    0
    The correct answer is option a.

    Explanation:

    The aggregate demand in an economy comprises of consumer spending, government spending, investment expenditure, and net exports.

    An increase in any of these components will cause the aggregate demand to increase or decrease.

    So when the government spending increases the aggregate demand will increase. This increase in the aggregate demand will cause the aggregate demand curve to shift to the right.

    This rightward shift in the aggregate demand curve will cause the price level and equilibrium quantity to increase.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “An increase in government spending initially and primarily shifts a. aggregate demand to the right. b. aggregate demand to the left. c. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Summarize the effect of credit card interest on the real cost of items.
Answers (1)
You would like to sell 290 shares of Xenith Bankshares, Inc. (XBKS). The current ask and bid quotes are $4.50 and $4.46, respectively. You place a limit sell order at $4.49. If the trade executes, how much money do you receive from the buyer?
Answers (1)
Several employees are facing the possibility of being laid off from work. By concluding that they should look for new jobs happens, they are: A. doing research. B. gathering information. O C. solving problems. D. asking questions.
Answers (1)
Mahaffey Enterprises has a temporary difference resulting in future deductible amounts of $500,000, income taxes payable of $800,000, and a tax rate of 20 percent. What should they record as their income tax expense for this period?
Answers (2)
What is the most common threat to information security in an organization?
Answers (1)
New Questions in Business
Zully has obtained an SBA loan to start a new business in her town. She has an arrangement with Ford Motor Company to be the exclusive seller of Ford vehicles.
Answers (1)
Joel wants to buy his best friend a home audio system for his birthday. He initially visits a few electronics stores to look at different brands of audio systems and compare their prices.
Answers (2)
Camera Corner is considering eliminating Model AE2 from its camera line because of losses over the past quarter.
Answers (1)
Debeers sells most of the diamonds it produces to industry. the company controls over 90 percent of the market and has great power over its distributors. in its marketing channel, debeers would be considered a:
Answers (1)
What are the four types of patogens
Answers (2)
Home » Business » An increase in government spending initially and primarily shifts a. aggregate demand to the right. b. aggregate demand to the left. c. aggregate supply to the right. d. neither aggregate demand nor aggregate supply in either direction.
Sign Up Forgot Password?