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

Question

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

Quizplus · Accepted Answer

A movement from point b to point c on a typical aggregate demand and supply graph would indicate both inflation and a decrease in output. This could be caused by an increase in the money supply, which boosts spending and prices, and an increase in the price of oil, which would increase production costs, leading to higher prices and potentially reduced output.

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