If government expenditures on goods and services increases by $20 billion,then aggregate demand
A)increases by $20 billion.
B)increases by more than $20 billion.
C)decreases by $20 billion.
D)decreases by more than $20 billion.
E)increases by less than $20 billion.

Question

Quizplus · Accepted Answer

An increase in government expenditures on goods and services typically leads to a multiplied increase in aggregate demand due to the multiplier effect, where the initial spending leads to further rounds of spending.

If Government Expenditures on Goods and Services Increases by $20