if-government-purchases-increase-what-is-the-likely-impact-on-the-aggregate-expe

Question

If government purchases increase, what is the likely impact on the aggregate expenditures line and macroeconomic equilibrium?

Accepted Answer

The aggregate expenditures line shifts upward, potentially increasing GDP at equilibrium.

Answer

The aggregate expenditures line shifts downward, potentially decreasing GDP at equilibrium.

Answer

The slope of the aggregate expenditures line increases.

Answer

The aggregate expenditures line remains unchanged.