
Understanding Government Spending and AD
Authored by julia thomson
Other
12th Grade

AI Actions
Add similar questions
Adjust reading levels
Convert to real-world scenario
Translate activity
More...
Content View
Student View
30 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is aggregate demand (AD) in an economy?
The total supply of goods and services in an economy at a given price level and time.
The total demand for goods and services in an economy at a given price level and time.
The total amount of money the government owes.
The total revenue generated by the government.
Answer explanation
Aggregate demand (AD) refers to the total demand for goods and services in an economy at a specific price level and time, making the second choice the correct answer.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which is a type of government spending?
Private investment
Current expenditure
Export revenue
Household consumption
Answer explanation
Current expenditure refers to government spending on goods and services that are consumed within the current period, making it a direct type of government spending. The other options do not represent government spending.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a government deficit?
When government revenue exceeds spending.
When government spending equals revenue.
When government spending exceeds revenue.
When government spending is less than revenue.
Answer explanation
A government deficit occurs when government spending exceeds revenue. This means the government is spending more money than it is bringing in, leading to a shortfall.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which is an example of capital expenditure?
Salaries for public servants
Healthcare services
Investment in roads
Transfer payments
Answer explanation
Capital expenditure refers to funds used by an organization to acquire or upgrade physical assets. 'Investment in roads' is a clear example, as it involves spending on infrastructure, unlike the other options which are operational expenses.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the national debt?
The total amount of money the government owes.
The total amount of money the government earns.
The total amount of money spent on public goods.
The total amount of money saved by the government.
Answer explanation
The national debt refers to the total amount of money the government owes, which is the correct choice. The other options describe earnings, spending, or savings, which do not define national debt.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which is a transfer payment?
Payment for new school construction
Unemployment benefits
Purchase of military equipment
Salaries for teachers
Answer explanation
Unemployment benefits are considered transfer payments as they are funds provided by the government to individuals without any exchange of goods or services, unlike payments for construction or salaries.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does government spending influence aggregate demand?
It decreases the total demand for goods and services.
It has no effect on the total demand for goods and services.
It increases the total demand for goods and services.
It only affects the supply side of the economy.
Answer explanation
Government spending increases aggregate demand by injecting money into the economy, leading to higher consumption and investment. This stimulates demand for goods and services, making the correct answer "It increases the total demand for goods and services."
Access all questions and much more by creating a free account
Create resources
Host any resource
Get auto-graded reports

Continue with Google

Continue with Email

Continue with Classlink

Continue with Clever
or continue with

Microsoft
%20(1).png)
Apple
Others
Already have an account?