An increase in government expenditure on goods and services
A) increases aggregate demand.
B) increases the aggregate quantity demanded.
C) decreases the aggregate quantity demanded.
D) decreases aggregate demand.

Question

Quizplus · Accepted Answer

An increase in government expenditure on goods and services directly increases aggregate demand by raising the total spending in the economy, which is a component of aggregate demand.

An Increase in Government Expenditure on Goods and Services