Recall that Y = C + I + G + NX. a. If government spending increases then
Question:
Recall that Y = C + I + G + NX.
a. If government spending increases then we model that as an increase in:
i. v.
ii. M.
iii. Q.
iv. T.
b. An increase in G shifts the AD curve:
i. inwards.
ii. outwards.
iii. doesn’t move the AD curve.
iv. shifts the LRAS curve.
c. A shift outward in the AD curve will tend to:
i. increase inflation, reduce growth.
ii. decrease inflation, increase growth.
iii. decrease inflation, decrease growth.
iv. increase inflation, increase growth.
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