Figure 14.2
-Refer to Figure 14.2. A movement from point d to point a could be caused by a simultaneous ________ and ________.
A) decrease in the money supply; increase in the price of oil
B) increase in the money supply; massive crop failure
C) decrease in taxes; decrease in the money supply
D) decrease in government spending; decrease in the price of oil

Question

Figure 14.2
-Refer to Figure 14.2. A movement from point d to point a could be caused by a simultaneous ________ and ________.
A) decrease in the money supply; increase in the price of oil 
B) increase in the money supply; massive crop failure 
C) decrease in taxes; decrease in the money supply 
D) decrease in government spending; decrease in the price of oil

Quizplus · Accepted Answer

A movement from point d to point a on a typical aggregate demand and supply graph would indicate a decrease in aggregate demand and a decrease in aggregate supply. This could be caused by a decrease in the money supply (which would decrease aggregate demand by making less money available for spending) and an increase in the price of oil (which would decrease aggregate supply by increasing production costs).

Figure 14.2 -Refer to Figure 14.2. a Movement from Point D to D