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The government is considering two alternative policies, one involving increased government purchases of 50 units, the other involving a tax cut of 50 units. Which policy will stimulate planned aggregate expenditure by more? Why?

Respuesta :

adefioyelaoye

Answer:

Increased government purchases will stimulate planned aggregate expenditure.

Explanation:

Aggregate expenditure in the economy refers to the current prices of all the goods and services in a country and urs usually dependent on a host of factors such as household consumption , investments , government spending , and net exports.

An increase in government spending will increase the aggregate expenditure in the system which also means that increased government purchases of 50 units will stimulate it more.