-In the above figure, if the economy is initially at point D and government expenditure increases, the economy will
A) move to point C.
B) move to point A.
C) move to point B.
D) stay at point D.

Question

-In the above figure, if the economy is initially at point D and government expenditure increases, the economy will
A) move to point C. 
B) move to point A. 
C) move to point B. 
D) stay at point D.

Quizplus · Accepted Answer

Government expenditure increases will shift the AD curve to the right, leading to an increase in output and price level. Therefore, the economy will move to point C.

-In the Above Figure, If the Economy Is Initially at Point