In the short run,an increase in government expenditures
A) raises the price level,but not real GDP.
B) raises real GDP,but not the price level.
C) raises real GDP and the price level.
D) raises neither real GDP nor the price level.

Question

Quizplus · Accepted Answer

In the short run, an increase in government expenditures typically raises both real GDP and the price level due to increased aggregate demand.

In the Short Run,an Increase in Government Expenditures