Figure 6-1
-In Figure 6-1,a movement from point B to point A can be explained by
A)an increase in spending due to a war.
B)an increase in spending due to increases in education expenditures.
C)an increase in the demand for manufacturing goods due to new technology.
D)a drop in the price level.

Question

Figure 6-1 
-In Figure 6-1,a movement from point B to point A can be explained by
A)an increase in spending due to a war. 
B)an increase in spending due to increases in education expenditures. 
C)an increase in the demand for manufacturing goods due to new technology. 
D)a drop in the price level.

Quizplus · Accepted Answer

Movement from point B to point A indicates a decrease in price level, as the vertical axis represents the price level and the horizontal axis represents the real GDP. All other options would result in a movement towards a higher real GDP and a higher price level.

Figure 6-1 -In Figure 6-1,a Movement from Point B to Point a to Point