-In the figure above, the shift in the aggregate demand curve from AD₁ to AD₂ could be result of
A)a fall in the price level.
B)a decrease in the quantity of money.
C)an increase in government expenditures on goods and services.
D)an increase in taxes.
E)a rise in the price level.

Question

-In the figure above, the shift in the aggregate demand curve from AD₁ to AD₂ could be result of
A)a fall in the price level. 
B)a decrease in the quantity of money. 
C)an increase in government expenditures on goods and services. 
D)an increase in taxes. 
E)a rise in the price level.

Quizplus · Accepted Answer

An increase in government expenditures on goods and services can lead to a rightward shift in the aggregate demand curve, moving it from AD₁ to AD₂, as it increases overall demand in the economy.

-In the Figure Above, the Shift in the Aggregate Demand