Chapter 12 Worksheet Part 1: Fill in the blanks 1) Aggregate Demand consists of _______________, _______________, _______________, and _______________ _______________. 2) _______________ policy is changes in government expenditures and taxation to achieve macroeconomic goals. 3) A budget _______________ occurs when government expenditures and greater than tax revenues. 4) A budget _______________ occurs when tax revenues are greater than government expenditures. 5) _______________ _______________ occurs when increases in government spending lead to decreases in private spending. Part 2: Discussion 1) Explain the relationship between Total Expenditures and Real GDP according to Keynesian theory