Use the following to answer questions: -(Figure: Inflationary and Recessionary Gaps) Refer to Figure: Inflationary and Recessionary Gaps. A movement from AD₁ to AD₃ could be caused by: A) increased government purchases. B) decreased government transfers. C) higher tax rates. D) decreased government purchases.

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Increased government purchases can shift the aggregate demand curve to the right, moving from AD₁ to AD₃, indicating an increase in overall demand in the economy.

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