Exhibit 10-9
-The movement shown in Exhibit 10-9 could be caused by
A)a decrease in the size of the labor force
B)an increase in the price level
C)positive net investment
D)an increase in autonomous consumption
E)a decrease in autonomous consumption

Question

Exhibit 10-9 
-The movement shown in Exhibit 10-9 could be caused by
A)a decrease in the size of the labor force 
B)an increase in the price level 
C)positive net investment 
D)an increase in autonomous consumption 
E)a decrease in autonomous consumption

Quizplus · Accepted Answer

The movement shown in Exhibit 10-9 represents an increase in aggregate demand. This increase in aggregate demand could be caused by positive net investment, which would increase business spending and demand for goods and services, leading to an overall increase in the level of economic activity. A decrease in the size of the labor force (A) or an increase in the price level (B) would cause a decrease in aggregate demand, resulting in a leftward shift of the AD curve. An increase in autonomous consumption (D) or a decrease in autonomous consumption (E) could affect the level of consumption spending but would not necessarily lead to a movement along the AD curve.

Exhibit 10-9 -The Movement Shown in Exhibit 10-9 Could Be Caused by Be