silvasyrena silvasyrena

01-07-2024
Social Studies

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What are the possible explanations for the changes in the share that government spending contributes to real GDP?

Answer :

GinnyAnswer GinnyAnswer

01-07-2024

Final answer:

Government spending changes can impact real GDP significantly by shifting aggregate demand, leading to changes in equilibrium real GDP.

Explanation:

Changes in government spending can significantly impact real GDP. When government spending increases, it shifts aggregate demand (AD) to the right, leading to an increase in equilibrium real GDP. Conversely, a decrease in government spending shifts AD to the left, resulting in a decrease in equilibrium real GDP. This relationship showcases how government spending plays a crucial role in influencing economic activity.

Learn more about Government Spending and Real GDP here:

https://brainly.com/question/32804144

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