Recall that Y = C + I + G + NX. 

a. If government spending increases then we model that as an increase in:

i. v.

ii. M.

iii. Q.

iv. T.

b. An increase in G shifts the AD curve:

i. inwards.

ii. outwards.

iii. doesn’t move the AD curve.

iv. shifts the LRAS curve.

c. A shift outward in the AD curve will tend to:

i. increase inflation, reduce growth.

ii. decrease inflation, increase growth.

iii. decrease inflation, decrease growth.

iv. increase inflation, increase growth.