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If the government increases its current consumption (G) by $2B, which of the following is most likely to happen to the aggregate consumption demand (Cd+G)
If the government increases its current consumption (G) by $2B, which of the following is most likely to happen to the aggregate consumption demand (Cd+G) if all households are forward looking and are able to follow their consumption-smoothing motive?
a.it decreases by an amount less than $2B
b.it decreases by $2B
c.it increases by an amount less than $2B
d.it increases by $2B
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