What would happen to aggregate demand if the federal government increased military purchases and state and local

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What would happen to aggregate demand if the federal government increased military purchases and state and local governments decreased their road-building budgets at the same time?

a. AD would increase because only federal government purchases affect AD.

b. AD would decrease because only state and local government purchases affect AD.

c. AD would increase if the change in federal purchases was greater than the change in state and local purchases.

d. AD would decrease if the change in federal purchases was greater than the change in state and local purchases.

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Exploring Macroeconomics

ISBN: 9781111970314

5th Edition

Authors: Robert L. Sexton

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Question Posted: Oct 29, 2024 08:01 AM

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What would happen to aggregate demand if the federal government increased military purchases and state and local

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Exploring Macroeconomics

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