-In the above figure, suppose the economy had been at point A and now is at B. What could have lead to the movement to B?
A) A tax hike.
B) Money wage rates rose.
C) Government expenditures on goods and services increased.
D) Winter storms cause factories in the north to be shut down for several weeks.

Question

-In the above figure, suppose the economy had been at point A and now is at B. What could have lead to the movement to B?
A) A tax hike. 
B) Money wage rates rose. 
C) Government expenditures on goods and services increased. 
D) Winter storms cause factories in the north to be shut down for several weeks.

Quizplus · Accepted Answer

An increase in government expenditures on goods and services can lead to an increase in aggregate demand, shifting the economy from point A to point B.

-In the Above Figure, Suppose the Economy Had Been at Point