According to aggregate demand and supply analysis, the U.S. involvement in the Vietnam War had the effect of ________.
A) increasing aggregate output, lowering unemployment, and raising the price level
B) decreasing aggregate output, lowering unemployment, and lowering the price level
C) increasing aggregate output, raising unemployment, and raising the price level
D) decreasing aggregate output, raising unemployment, and lowering the price level

Question

Quizplus · Accepted Answer

The U.S. involvement in the Vietnam War led to increased government spending, which, according to aggregate demand and supply analysis, would increase aggregate output, lower unemployment due to higher demand for labor, and raise the price level due to increased demand in the economy.

According to Aggregate Demand and Supply Analysis, the U