Suppose that government spending on defense rises by $50 billion.What happens to the aggregate demand curve?
A) It shifts right by $50 billion at each price level.
B) It shifts right by more than $50 billion at each price level.
C) It shifts right by less than $50 billion at each price level.
D) The aggregate demand does not shift; the aggregate supply curve shifts right by $50 billion at each price level.
Correct Answer:
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