-In the above figure, if the economy is initially at point D and government expenditure increases, the economy will move to point
A) move to point C.
B) stay at point D.
C) move to point B.
D) move to point A.

Question

-In the above figure, if the economy is initially at point D and government expenditure increases, the economy will move to point
A) move to point C. 
B) stay at point D. 
C) move to point B. 
D) move to point A.

Quizplus · Accepted Answer

Government expenditure increases will shift the AD curve to the right, leading to an increase in output and a higher price level. Therefore, the economy will move from point D to point A.

-In the Above Figure, If the Economy Is Initially at Point