Refer to the information provided in Figure 30.1 below to answer the question(s) that follow. Figure 30.1 -Refer to Figure 30.1. Growth in aggregate output causes a ________ through the accelerator effect. A) shift from I₂ to I₃ B) shift from I₃ to I₂ C) shift from Point C to Point B D) shift from Point B to Point C

Question

Quizplus · Accepted Answer

According to the accelerator effect, an increase in aggregate output will lead to an increase in investment demand, which will shift the IS curve to the right. Therefore, the correct answer is B, which shows the shift from I₃ (original position of IS) to I₂ (new position of IS) as a result of the growth in aggregate output.

Refer to the Information Provided in Figure 30