The aggregate demand curve will shift to the right by more than, shift right government purchases the initial increase in government purchases.
What is demand?
The term “demand” is relying on people needs and wants to the amount of goods and services. Demand is an economic notion that deals with the connection between consumer demand for goods and services and their market prices.
Due to higher inflation and faster short-term growth, the aggregate demand curve was pushed to the right more than government spending. Spending on aggregate demand increased.
As a result, the aggregate demand curve is shift to the right side as spending more to government purchases.
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