A new government policy to build more public infrastructure like roads, transit and sewers
A) decreases short-run aggregate supply.
B) increases aggregate quantity demanded.
C) decreases aggregate quantity demanded.
D) increases aggregate demand.
E) decreases aggregate demand.

Question

Quizplus · Accepted Answer

The new government policy to build more public infrastructure like roads, transit, and sewers will increase aggregate demand as it will increase government spending and create jobs in the short run. This increased spending and job creation will lead to an increase in consumer and business confidence, leading to further increases in aggregate demand.

A New Government Policy to Build More Public Infrastructure Like