Expenditure on alternative energy and the nation's infrastructure ________ short-run aggregate supply and ________ potential GDP.
A)increases; does not change
B)increases; increases
C)increases; decreases
D)does not change; increases
E)does not change; does not change

Question

Quizplus · Accepted Answer

Expenditure on alternative energy and the nation's infrastructure would increase short-run aggregate supply as it would create jobs and increase demand for goods and services. The increase in aggregate supply would lead to an increase in potential GDP, as the economy becomes more productive and efficient.

Expenditure on Alternative Energy and the Nation's Infrastructure ________ Short-Run