-Refer to the above figure. Suppose the economy had been at point A and now is at B. What could have caused the movement to B?
A) Unusually good weather causes the wheat crop to be larger than normal.
B) Government spending increased causing aggregate demand to increase.
C) Winter storms cause factories in the north to be shut down for several weeks.
D) Both the labor force and the population increased.

Question

-Refer to the above figure. Suppose the economy had been at point A and now is at B. What could have caused the movement to B?
A) Unusually good weather causes the wheat crop to be larger than normal. 
B) Government spending increased causing aggregate demand to increase. 
C) Winter storms cause factories in the north to be shut down for several weeks. 
D) Both the labor force and the population increased.

Quizplus · Accepted Answer

The movement from point A to B on an economic graph typically represents an increase in aggregate demand, which can be caused by an increase in government spending. This is because government spending is a component of aggregate demand, and an increase in it directly boosts the economy's overall demand for goods and services.

-Refer to the Above Figure