A decrease in government spending would cause which of the following to happen?
A) The aggregate demand curve would shift to the left.
B) The aggregate demand curve would shift to the right.
C) The aggregate supply curve would shift to the right.
D) The aggregate supply curve would shift to the left.

Question

Quizplus · Accepted Answer

When government spending decreases, it leads to a decrease in aggregate demand as there is less spending in the economy. This shift in demand would cause a contraction in the economy, leading to a leftward shift in the aggregate demand curve.

A Decrease in Government Spending Would Cause Which of the Following