Following a prolonged period of economic stagnation, the government of a nation decides to initiate a massive, state-funded program to upgrade the country's national electricity grid and public transit networks.
Draw an aggregate demand (AD) and aggregate supply (AS) diagram to illustrate the likely short-run impact of this expansion in government expenditure on the equilibrium price level and real output.
12 exam-style questions on Edexcel A A Level Economics 2.2.4 Government expenditure (G). Each one has a worked solution and a mark scheme showing where the marks go.