_____ government spending, _____ transfer payments, and _____ taxes all increase aggregate demand.

Question

Quizplus · Accepted Answer

- Increasing government spending will increase aggregate demand as the government is directly injecting more money into the economy.
- Increasing transfer payments (such as unemployment benefits or social security) will also increase aggregate demand as individuals will have more disposable income to spend.
- Decreasing taxes will lead to an increase in consumer disposable income, which will increase consumption and aggregate demand.

_____ Government Spending, _____ Transfer Payments, and _____ Taxes All

___ Government Spending, _ Transfer Payments, and ___ Taxes All