Figure 10-7

-Which of the diagrams in Figure 10-7 represents a decrease in consumer spending combined with a positive supply shock?
A)(A) and (B)
B)(C) and (D)
C)(A) and (
B) and (

Question

Figure 10-7
​  ​
-Which of the diagrams in Figure 10-7 represents a decrease in consumer spending combined with a positive supply shock?
A)(A) and (B)
B)(C) and (D)
C)(A) and (
B) and (

Quizplus · Accepted Answer

A decrease in consumer spending shifts the aggregate demand curve to the left, while a positive supply shock shifts the aggregate supply curve to the right. Diagram (A) shows a leftward shift of the aggregate demand curve and a rightward shift of the aggregate supply curve, which represents a decrease in consumer spending combined with a positive supply shock.

Figure 10-7 ​ ​

Figure 10-7