Increased government spending in the short run will _____ aggregate output and _____ aggregate price levels.
A) increase;increase
B) increase;decrease
C) decrease;decrease
D) decrease;increase

Question

Quizplus · Accepted Answer

Increased government spending will lead to an increase in aggregate demand, which will in turn increase real output and increase the price level (inflation).

Increased Government Spending in the Short Run Will _____ Aggregate