An increase in government expenditure on goods and services
A) decreases the aggregate quantity demanded.
B) increases the aggregate quantity demanded.
C) decreases aggregate demand.
D) increases aggregate demand.

Question

Quizplus · Accepted Answer

An increase in government expenditure on goods and services would lead to an increase in aggregate demand as there would be an increase in demand for goods and services due to government spending. This would lead to an increase in the aggregate quantity demanded.

An Increase in Government Expenditure on Goods and Services