Which of the following will not result from an increase in government spending o

Question

Which of the following will not result from an increase in government spending on transportation infrastructure which lowers shipping costs for businesses? A.  SRAS curve shifts to the right B.  SRAS curve shifts to the left C.  AD curve shifts to the right D.  LRAS curve shifts to the right in the long run Which of the following will not result from an increase in government spending on transportation infrastructure which lowers shipping costs for businesses? A.  SRAS curve shifts to the right B.  SRAS curve shifts to the left C.  AD curve shifts to the right D.  LRAS curve shifts to the right in the long run

Explanation / Answer

An increase in the government spending can result in the decrease in the price level with which the demand for the product increases and AD curve shifts to the right. Also the marginal cost of the product will come down due to decrease in the shipping charge with which the supply will increase and SRAS curve and lRAS curve will shift towards right.

THEREFORE OPTION B IS THE CORRECT ANSWER FOR FOR THIS QUESTION

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