If the government spending increases by x units, then AD x units.
A
increases by
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
increases more than
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
C
decreases by
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
decreases more than
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution
The correct option is B increases more than If the government spending increases by x units, then AD increases by more than x units due to the government spending multiplier effect.