Suppose that the Canadian government doubles its spending on health care.The _____ curve shifts _____,output _____,and prices _____.
A) short-run aggregate supply;right;increases;decrease
B) short-run aggregate supply;left;decreases;increase
C) aggregate demand;left;decreases;decrease
D) aggregate demand;right;increases;increase

Question

Quizplus · Accepted Answer

When the government increases its spending, it boosts aggregate demand, shifting the aggregate demand curve to the right. This leads to an increase in output and prices.

Suppose That the Canadian Government Doubles Its Spending on Health