According to the circular flow model,all else constant,an increase in government spending should cause an increase in spending,income,and production in the economy.

Question

Quizplus · Accepted Answer

An increase in government spending is a component of the injection in the circular flow model. This injection leads to an increase in spending and income, which results in increased production in the economy, assuming all other factors remain constant.

According to the Circular Flow Model,all Else Constant,an Increase in Government