If the government increases spending by $100 million and the spending multiplier is 2, what is the expected total increase in aggregate demand?

When the government increases spending by $100 million, this money goes into the economy and creates more jobs and income. The spending multiplier tells us how much total demand will increase based on that initial spending. If the spending multiplier is 2, it means that for every dollar spent, the total demand will increase by two dollars. So, if the government spends $100 million, the total increase in aggregate demand will be $100 million times 2, which equals $200 million. This shows how government spending can have a big impact on the overall economy by encouraging more spending and investment.