-Refer to the above figure. Suppose that the economy initially is operating along AD₁. If the government seeks to close the recessionary gap by raising government spending without any change in taxation, which moves the aggregate demand curve from to , then to . Which of the following scenarios is true?

Question

-Refer to the above figure. Suppose that the economy initially is operating along AD<sub>1</sub>. If the government seeks to close the recessionary gap by raising government spending without any change in taxation, which moves the aggregate demand curve from to , then to . Which of the following scenarios is true? A) Interest rates fall and investment rises. B) Both interest rates and investment fall. C) Both interest rates and investment rise. D) Interest rates rise and investment falls.

-Refer to the above figure. Suppose that the economy initially is operating along AD₁. If the government seeks to close the recessionary gap by raising government spending without any change in taxation, which moves the aggregate demand curve from

to

, then to

. Which of the following scenarios is true?

Quizplus · Accepted Answer

The Answer of -Refer to the above figure. Suppose that the economy initially is operating along AD₁. If the government seeks to close the recessionary gap by raising government spending without any change in taxation, which moves the aggregate demand curve from to , then to . Which of the following scenarios is true?

-Refer to the Above Figure