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In comparing an increase in government spending on goods and services to an incr

ID: 1143453 • Letter: I

Question

In comparing an increase in government spending on goods and services to an increase in private investment spending, we can correctly say that in the short run:
they will both shift aggregate supply. they will both shift aggregate demand. government spending is inflationary, private investment is not. government spending must equal taxes; private investment must equal savings. In comparing an increase in government spending on goods and services to an increase in private investment spending, we can correctly say that in the short run:
they will both shift aggregate supply. they will both shift aggregate demand. government spending is inflationary, private investment is not. government spending must equal taxes; private investment must equal savings. they will both shift aggregate supply. they will both shift aggregate demand. government spending is inflationary, private investment is not. government spending must equal taxes; private investment must equal savings. they will both shift aggregate supply.

Explanation / Answer

Answer: they will both shift aggregate demand.

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