What influences our spending during the slow economy?
How much can our spending create the multiplier effects on the economy? Do you think an increase in government’s spending (G) can boost the Aggregate Demand (AD) in the recession? Why have businesses left it to the consumer to carry the nation recently?
An increase in government spending cannot really increase aggregate demand unless you assume that the resources it takes out of the private sector are less productive than what the government spends on. Not usually the case.