Figure 14.1
-Figure 14.1 shows three aggregate demand curves. A movement from curve AD1 to curve AD0 could be caused by an)
A)decrease in the money supply.
B)decrease in taxes.
C)increase 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 AD0 could be caused by an)
A)decrease in the money supply. 
B)decrease in taxes. 
C)increase in the price level. 
D)increase in government spending.

Quizplus · Accepted Answer

A decrease in the money supply would lead to a leftward shift in the aggregate demand curve, moving from AD1 to AD0, as it reduces the overall spending in the economy.

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