-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) Government expenditures on goods and services increased.
B) Money wage rates rose.
C) Winter storms cause factories in the north to be shut down for several weeks.
D) A tax hike.

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) Government expenditures on goods and services increased. 
B) Money wage rates rose. 
C) Winter storms cause factories in the north to be shut down for several weeks. 
D) A tax hike.

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