Figure 9.1 shows three aggregate demand curves. A movement from curve AD1 to curve AD2 could be caused by a(n)
A) increase in the money supply.
B) increase in taxes.
C) increase in the price level.
D) decrease in government spending.

Question

Figure 9.1 shows three aggregate demand curves. A movement from curve AD1 to curve AD2 could be caused by a(n) 
A) increase in the money supply.
B) increase in taxes.
C) increase in the price level.
D) decrease in government spending.

Quizplus · Accepted Answer

An increase in the money supply would shift the aggregate demand curve to the right, causing a movement from AD1 to AD2.

Figure 91 Shows Three Aggregate Demand Curves