An increase in government spending, all other things unchanged, will cause the aggregate demand curve to:
A) become positively sloped.
B) remain constant.
C) shift to the right.
D) shift to the left.

Question

Quizplus · Accepted Answer

An increase in government spending will lead to an increase in aggregate demand, which is shown by a rightward shift in the aggregate demand curve. Therefore, the correct choice is (C) shift to the right.

An Increase in Government Spending, All Other Things Unchanged, Will