When spending by the federal government exceeds net taxes,_____.

A) the price level tends to fall
B) the money supply must fall
C) the aggregate demand curve shifts rightward
D) aggregate supply moves rightward
E) there is a federal budget surplus

Question

Skylar Nolen · Accepted Answer

Final Answer : C, Explanation :  When the federal government spends more than it collects in net taxes, it increases the total demand for goods and services in the economy, leading to a rightward shift in the aggregate demand curve. This is because the additional government spending directly increases aggregate demand.

When spending by the federal government exceeds net taxes,_____.

A) the price level tends to fall
B) the money supply must fall
C) the aggregate demand curve shifts rightward
D) aggregate supply moves rightward
E) there is a federal budget surplus

Definitions

Learning Objectives

Learning Objectives

Related questions

When spending by the federal government exceeds net taxes,_____.A) the price level tends to fallB) the money supply must fallC) the aggregate demand curve shifts rightwardD) aggregate supply moves rightwardE) there is a federal budget surplus

Definitions

Learning Objectives

Learning Objectives

Related questions

When spending by the federal government exceeds net taxes,_____.

A) the price level tends to fall
B) the money supply must fall
C) the aggregate demand curve shifts rightward
D) aggregate supply moves rightward
E) there is a federal budget surplus