The initial impact of an increase in government spending is to shift ?
Correct answer: A. aggregate demand to the right
- A. aggregate demand to the right
- B. aggregate demand to the left
- C. aggregate supply to the right
- D. aggregate supply to the left
Explanation
Government spending is a component of aggregate demand, so its immediate effect is to increase aggregate demand and shift its curve to the right. Any later effects on aggregate supply are not the initial impact.
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