goods spending

What Happens When Government Purchases Increase?

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What Happens When Government Purchases Increase? According to Keynesian economics, if the economy is producing less than potential output, government spending can be used to employ idle resources and boost output. Increased government spending will result in increased aggregate demand, which then increases the real GDP, resulting in an rise in prices. What happens when

What Happens When Government Spending Increases?

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What Happens When Government Spending Increases? Fiscal Multiplier is often seen as a way that spending can boost growth in the economy. This multiplier state that an increase in the government spending leads to an increase in some measures of economic wide output such as GDP. What happens when government purchases increase? According to Keynesian