In a binding situation, changes in government spending do not shift the AD curve.

Name: In a binding situation, changes in government spending do not shift the AD curve.
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Question

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Changes in government spending directly affect the aggregate demand (AD) curve by either shifting it to the right (with an increase in government spending) or to the left (with a decrease in government spending), as government spending is a component of aggregate demand.

In a Binding Situation, Changes in Government Spending Do Not