In the model where q,when q increases,government spending,if choosen optimally,should

Question

Quizplus · Accepted Answer

According to the model, when q increases, it means that households are willing to save more and consume less. This leads to a decrease in aggregate demand and output. To counteract this decrease in demand and stabilize the economy, the government should increase its spending to boost aggregate demand and output. Therefore, the answer is A - increase.

In the Model Where Q,when Q Increases,government Spending,if Choosen Optimally,should