If the U.S. government increases its expenditures (without any change in taxes)and at the same time the Federal Reserve Bank increases the money supply, the AD curve would:
A)shift to the left.
B)shift to the right.
C)become flatter.
D)become steeper.

Question

Quizplus · Accepted Answer

When the U.S. government increases its expenditures without changing taxes, it injects more money into the economy, boosting demand. Simultaneously, if the Federal Reserve increases the money supply, it further enhances the purchasing power of individuals and businesses. Both actions lead to an increase in aggregate demand, represented by a rightward shift of the AD curve.

If the US Government Increases Its Expenditures (Without Any Change in Taxes)and