Predict how the increased government spending might affect price stability.

There are many variables that play into the impact that
increased government spending will have on price stability.  However, one impact that
might result from excessive government spending is
inflation.

If the government spends too much money
(especially when it finances this spending by borrowing), inflation can occur.  This
could happen for two reasons.  First of all, aggregate demand could go up with increased
government spending.  People will have more money to spend, which will tend to drive
price levels up.  Second, if government borrowing "crowds out" private borrowing, less
investment will happen in the private sector.  This can suppress aggregate supply.  A
decrease in aggregate supply can also cause prices to
increase.

Overall, then,
excessive government spending is likely to lead to
inflation.