Suppose that the federal administration plans to fight a deep, ongoing recession with a nationwide plan of increasing infrastructure. Congress approves it and adjusts the budget accordingly to put the plan in motion immediately. Aggregate demand spending components include consumption (C), investment (I), government (G), and exports (X) minus imports (M). Analyze what the aggregate demand and aggregate supply model predicts about the infrastructure plan to answer three questions. Does the level of G increase ( ), decrease (-), or stay constant (0)

Increase (+)

Explanation:

The Government component of the Aggregate Demand refers to money spent by the Government/ Public sector to provide certain needs for the economy such as Education, Defense and Healthcare.

When the government spends on infrastructural development such as the scenario described in the text, they are engaging in a form of spending known as Government Investment. This will increase the amount of G in the aggregate demand model.

the specific actions take by the fed. what the fed was attempting to do by taking these actions. the result of the actions taken by the fed

fractionally backed paper money

fiat money

paper money

metallic money