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

Question

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

Quizplus · Accepted Answer

A decrease in taxes would increase disposable income, leading to an increase in aggregate demand.

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