Figure 15-1

-Refer to Figure 15-1.Ceteris paribus,an increase in government spending would be represented by a movement from
A) AD₁ to AD₂.
B) AD₂ to AD₁.
C) point A to point B.
D) point B to point A.

Question

Figure 15-1
 
-Refer to Figure 15-1.Ceteris paribus,an increase in government spending would be represented by a movement from
A) AD₁ to AD₂. 
B) AD₂ to AD₁. 
C) point A to point B. 
D) point B to point A.

Quizplus · Accepted Answer

An increase in government spending would lead to an increase in aggregate demand (AD), which would shift AD to the right from AD₁ to AD₂. Therefore, the correct answer is A.

Figure 15-1 -Refer to Figure 15-1.Ceteris Paribus,an Increase in Government Spending Would