The government increases the level of government expenditure.If there is no change in the aggregate supply curve,then aggregate demand will ________,real GDP will ________,and the price level will ________.
A)decrease;increase;increase
B)increase;increase;increase
C)remain the same;increase;increase
D)increase;remain the same;increase
E)decrease;remain the same;decrease

Question

Quizplus · Accepted Answer

An increase in government expenditure raises aggregate demand, leading to higher real GDP and a higher price level if aggregate supply remains unchanged.

The Government Increases the Level of Government Expenditure