Which of the following government policies would increase aggregate demand?
A)a deficit in the government budget
B)a stimulation of investment through an increase in taxes
C)a stimulation of consumption through an increase in taxes
D)a surplus in the government budget
E)a decrease in government spending

Question

Quizplus · Accepted Answer

A deficit in the government budget means that the government is spending more money than it is collecting in taxes, which increases aggregate demand as the government is providing more money for goods and services.

Which of the Following Government Policies Would Increase Aggregate Demand