How does an increase in government spending, a component of fiscal policy, influence the aggregate demand curve in the context of the aggregate supply and demand analysis?

When the government increases its spending, it puts more money into the economy. This extra money can help create jobs, build roads, or improve schools, which means people have more income to spend. As people buy more goods and services, the overall demand in the economy rises, shifting the aggregate demand curve to the right. For example, if the government spends money on a new highway, construction workers earn wages and spend money at local businesses, increasing demand. Overall, this increase in government spending boosts economic activity and can lead to higher production and employment.