Question

 In a binding situation, a decrease in government spending

 Select one:

 a. does not shift the ADcurve.

 b. causes the ADcurve to become horizontal.

 c. shifts the ADcurve to the right.

 d. shifts the AD curve to the left.

 An increase in government purchases shifts the _______  curve to the _______ 

 Select one:

 a. aggregate supply; right

 b. aggregate supply; left

 c. aggregate demand, left

 d. aggregate demand; right

 Which of the following is an example of an expansionary fiscal policy?

 Select one:

 a. the federal government increasing the amount of money spent on public health programs

 b. the federal government increasing the marginal tax rate on incomes above $200,000

 C. the Fed selling government securities in the open market

 d. the federal government reducing pollution standards to allow firms to produce more output

Answer 1

1) shifts the aggregate demand curve to the Left.

( Even on binding situation , a reduction in government expenditure will shift the aggregate demand curve via it's influence on the components of aggregate demand.lnfact government expenditure multiplier will be larger than one, if zero bounds on interest rate binds.)

Note : Binding isn't specified in the question.

2) demand curve ,right

( government purchases is a part of public expenditure and public expenditure itself is a component of aggregate demand. An increase in public expenditure will result in an increase in aggregate demand. As a result, the aggregate demand curve shifts to right.)

3)The Federal government increasing the amount of money spend on health programs.

( Foscal policy is the pokicy of the government .There are two tools of public expenditure, taxation and expenditure. Above mentioned example is a part of public expenditure.