A) Aggregate demand falls by the amount of the government spending.
B) There is no effect.
C) Aggregate demand rises by the amount of the government spending times the multiplier.
D) Aggregate demand rises by the amount of the government spending.
B) There is no effect.
C) Aggregate demand rises by the amount of the government spending times the multiplier.
D) Aggregate demand rises by the amount of the government spending.
ANSWER:
D) Aggregate demand rises by the amount of the government spending.