A decrease in government spending will cause a(n)
A) increase in the quantity of real output demanded.
B) decrease in the quantity of real output demanded.
C) decrease in aggregate demand.
D) increase in aggregate demand.

Question

Quizplus · Accepted Answer

A decrease in government spending will result in fewer government purchases of goods and services, causing a decrease in aggregate demand, as government spending is a component of aggregate demand.

A Decrease in Government Spending Will Cause A(n)