Refer to the information provided in Figure 28.7 below to answer the question(s) that follow. Figure 28.7
-Refer to Figure 28.7. Which combinations of events could move the economy from Point A to Point B, and then from Point B to Point E?

Question

Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.  Figure 28.7
-Refer to Figure 28.7. Which combinations of events could move the economy from Point A to Point B, and then from Point B to Point E?

Quizplus · Accepted Answer

A contractionary monetary policy would shift the AD curve leftward, causing the economy to move from Point A to Point B. This is because higher interest rates would decrease investment and consumption spending. A rightward shift in the AS curve would then cause the economy to move from Point B to Point E, as this would increase output and decrease the price level. An expansionary fiscal policy, as in choices C and D, would shift the AD curve rightward, which is opposite to what is needed to move from Point B to Point E.

Refer to the Information Provided in Figure 28