Figure 15-2

-Refer to the Figure 15-2.In a closed economy,which of the following could have caused the economy to move from a to b?
A)a wave of optimism
B)a decrease in price
C)either fiscal or monetary contraction
D)an increase in the price of oil

Question

Figure 15-2
 
-Refer to the Figure 15-2.In a closed economy,which of the following could have caused the economy to move from a to b?
A)a wave of optimism 
B)a decrease in price 
C)either fiscal or monetary contraction 
D)an increase in the price of oil

Quizplus · Accepted Answer

Movement from point A to B indicates a decrease in output and an increase in unemployment. This is consistent with a contractionary fiscal policy or monetary policy, which would decrease aggregate demand in the economy. A wave of optimism, decrease in price, or increase in the price of oil would not necessarily cause such a shift in the economy.

Figure 15-2 -Refer to the Figure 15-2.In a Closed Economy,which of the Closed