-In the above figure, suppose the economy had been at point A and now is at B. What could have led to the movement to B?
A) a tax increase
B) an increase in government expenditures on goods and services
C) Winter storms caused factories in the north to be shut down for several weeks.
D) an increase in the money wage rates

Question

-In the above figure, suppose the economy had been at point A and now is at B. What could have led to the movement to B?
A) a tax increase 
B) an increase in government expenditures on goods and services 
C) Winter storms caused factories in the north to be shut down for several weeks. 
D) an increase in the money wage rates

Quizplus · Accepted Answer

An increase in government expenditures on goods and services can lead to an expansionary fiscal policy effect, which can shift the aggregate demand curve to the right, moving the economy from point A to point B, indicating higher output and price levels.

-In the Above Figure, Suppose the Economy Had Been at Point