When government purchases increase,the spending multiplier indicates the _____.

A) amount of movement along the aggregate demand curve
B) amount of movement along the aggregate supply curve
C) size of the rightward shift of the aggregate demand curve at a given price level
D) size of the rightward shift of the aggregate supply curve at a given price level
E) size of the expansionary gap

Spending Multiplier

The ratio of a change in output (economic activity) to a change in spending, indicating the ripple effect of an initial expenditure through the economy.

Aggregate Demand Curve

A graphical representation of the total demand for goods and services in an economy at various price levels, holding all else constant.

Expansionary Gap

A situation where the actual output in an economy exceeds the potential output, leading to inflationary pressure.