Which of the Following Is True When the Government Attempts

Multiple Choice

Which of the following is true when the government attempts to move the economy to full employment by increasing spending?

A) The desired stimulus should be set by the AD shortfall multiplied by the multiplier.
B) It must initially spend more than the GDP gap if the aggregate supply curve is upward-sloping.
C) The total change in spending includes both the new government spending and the subsequent increases in consumer spending.
D) The desired stimulus should be set by the multiplier divided by the AD shortfall.