Consider the following statement.
"When unemployment is present, an increase in government spending will tend to increase aggregate demand and real output by a larger amount than the initial increase in government spending."
Complete the following statement.
This statement is because an expansionary fiscal policy will cause the total increase in aggregate demand to be the initial increase in aggregate demand due to the multiplier process.

True;greater than.

Explanation:

The statement that "when unemployment is present, an increase in government spending will tend to increase aggregate demand and real output by a larger amount than the initial increase in government spending." is true because an expansionary fiscal policy will cause the total increase in aggregate demand to be greater than the initial increase in aggregate demand due to the multiplier process.

The above is in accordance with the theory of John M. Keynes, he was a notable British economist.

According to the Keynesian theory, government spending or expenditures should be increased and taxes should be lowered when faced with a recession, in order to create employment and boost the buying power of consumers.

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