-Refer to Figure 15-2.If the economy is initially at equilibrium at $7 trillion,what is the least likely cause of the shift of the aggregate expenditure line from AE₁ to AE₂,and the shift of the aggregate demand curve from AD₁ to AD₂?
A) An increase in government purchases
B) A decrease in taxes
C) An increase in autonomous consumption
D) An increase in the money supply
E) A decrease in the price level.

Question

-Refer to Figure 15-2.If the economy is initially at equilibrium at $7 trillion,what is the least likely cause of the shift of the aggregate expenditure line from AE₁ to AE₂,and the shift of the aggregate demand curve from AD₁ to AD₂?
A) An increase in government purchases 
B) A decrease in taxes 
C) An increase in autonomous consumption 
D) An increase in the money supply 
E) A decrease in the price level.

Quizplus · Accepted Answer

A decrease in the price level typically causes a movement along the aggregate demand curve, not a shift of the curve itself.