how-can-increased-government-spending-lead-to-a-higher-gdp-in-the-context-of-exp

Question

How can increased government spending lead to a higher GDP in the context of expansionary fiscal policy?

Accepted Answer

By increasing aggregate demand and shifting the AD curve to the right.

Answer

By decreasing aggregate demand and shifting the AD curve to the left.

Answer

By decreasing aggregate demand and stabilizing price levels.

Answer

By maintaining current levels of aggregate demand and GDP.