Refer to diagram 2 below, if supply-side policies succeeded in shifting the aggregate supply curve to the right to AS₂ then a shift in aggregate demand curve from AD₁ to AD₂ would see national income: Diagram 2

Question

Quizplus · Accepted Answer

The shift in aggregate demand from AD₁ to AD₂ would cause an increase in national income from Y₁ to Y₂ as the intersection of the aggregate demand and supply curves moves from point B0 to point B12. Therefore, the correct answer is B.

Refer to Diagram 2 Below, If Supply-Side Policies Succeeded in Shifting