Refer to the information provided in Figure 32.2 below to answer the question(s) that follow. Figure 32.2 -Refer to Figure 32.2. According to Keynes, a(n) ________ will shift AD₁ to the right. A) increase in taxes B) decrease in the money supply C) increase in government spending D) all of the above

Question

Quizplus · Accepted Answer

According to Keynes, an increase in government spending will shift AD₁ to the right. This is because government spending is a component of Aggregate Demand (AD) and an increase in this component will lead to an increase in the overall AD, shifting the curve to the right. Increases in taxes and decreases in the money supply would have the opposite effect and shift the curve to the left. Therefore, A and B are not the correct choices.

Refer to the Information Provided in Figure 32