-In the above figure,if the economy is initially at point B and taxes are raised,if potential GDP does not change then the economy will move to point
A) move to point C.
B) move to point A.
C) move to point D.
D) stay at point B.

Question

-In the above figure,if the economy is initially at point B and taxes are raised,if potential GDP does not change then the economy will move to point
A) move to point C. 
B) move to point A. 
C) move to point D. 
D) stay at point B.

Quizplus · Accepted Answer

If taxes are raised, the aggregate demand curve will shift to the left. If potential GDP does not change, then the economy will move to point A, where the new aggregate demand curve intersects the potential GDP line.

-In the Above Figure,if the Economy Is Initially at Point