A temporary increase in government purchases of goods and services
A)increases desired investment.
B)increases desired consumption.
C)decreases desired consumption.
D)increases desired saving.

Question

Quizplus · Accepted Answer

A temporary increase in government purchases of goods and services increases aggregate demand, which leads to an increase in output and employment. This, in turn, leads to an increase in desired investment, as businesses anticipate increased demand for their products and services.

A Temporary Increase in Government Purchases of Goods and Services