Figure 14.1
-Figure 14.1 shows three aggregate demand curves. A movement from curve AD1 to curve AD2 could be caused by an)
A)decrease in the money supply.
B)increase in taxes.
C)decrease in the price level.
D)increase in government spending.

Question

Figure 14.1
-Figure 14.1 shows three aggregate demand curves. A movement from curve AD1 to curve AD2 could be caused by an)
A)decrease in the money supply. 
B)increase in taxes. 
C)decrease in the price level. 
D)increase in government spending.

Quizplus · Accepted Answer

An increase in government spending shifts the aggregate demand curve to the right, from AD1 to AD2, as it increases overall demand in the economy.

Figure 14.1 -Figure 14.1 Shows Three Aggregate Demand Curves. a Movement from Movement