Everything else held constant, a decrease in government spending ________ aggregate ________.

Question

BlackTom AI · Accepted Answer

1) Relevant knowledge points and concepts Government spending (G) is a component of aggregate demand (AD). In the simple Keynesian framework AD = C + I + G + NX (consumption + investment + government purchases + net exports). “Everything else held constant” (ceteris paribus) means other components and parameters do not change. 2) Complete reasoning process step by step AD depends directly on G: AD = C(Y − T) + I(r) + G + NX. If G falls and nothing else changes, the AD curve shifts. A decrease in G reduces total planned spending at each price level, so aggregate demand decreases. Aggregate supply (short-run or long-run) is not directly changed by a one-time change in government purchases under the ceteris paribus assumption. 3) Calculations and intermediate steps (multiplier logic) In the simple income-expenditure model, equilibrium output Y satisfies: Y = C + I + G + NX. If consumption is C = C0 + MPC·(Y − T) and autonomous spending is A = C0 + I + G + NX, then Y = A + MPC·Y => Y(1 − MPC) = A => Y = A/(1 − MPC). A change in G gives ΔY = (1/(1 − MPC)) · ΔG. Because the multiplier 1/(1 − MPC) is positive, the sign of ΔY is the same as ΔG. If ΔG < 0, then ΔY < 0: output and demand fall. 4) Why the correct answer is correct A lower G directly reduces aggregate demand through the spending component and, via the multiplier, lowers equilibrium output/demand. Therefore a decrease in government spending decreases aggregate demand. 5) Why the other options are incorrect a. “increases; supply” is wrong because a fall in G does not increase aggregate supply. b. “decreases; supply” is wrong because government purchases do not directly shift aggregate supply in the short run under ceteris paribus. d. “increases; demand” is the opposite of what happens—reducing G cannot increase AD. 6) Conclusion Thus the correct choice is c. decreases; demand, which matches the provided answer.

Everything else held constant, a decrease in government spending aggregate .单项选择题

类似问题

Which is expansionary monetary policy?

Expansionary monetary policy in an open economy with a floating exchange rate is:

What is happening at the horizontal section of aggregate supply (AS)?

Expansionary monetary policy in an open economy with a floating exchange rate will likely ____ a trade deficit.

14. The kind of products that cultural entrepreneurs create are usually Answer Question 12[input].

Listen to this mini-lecture on cultural entrepreneurship, and answer the following questions. Question 13 and 14. Fill in the gaps with ONE OR TWO WORDS from the mini-lecture. 13. Cultural entrepreneurship aims to support and maintain Answer Question 11[input].

Question 11 and 12. Choose A, B or C as the best answer. 11. As role models, human teachers:

According to FSANZ’s Plain English Allergen Labelling (PEAL), which of the following statements is compliant for a product containing egg?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单

Everything else held constant, a decrease in government spending ________ aggregate ________.单项选择题