-Refer to the above diagram. Other things equal, an interest rate decrease coupled with a rightward shift in curve A will:

A) shift curve B upward.
B) shift curve B downward.
C) has no effect on curve B
D) reduce GDP.

Question

-Refer to the above diagram. Other things equal, an interest rate decrease coupled with a rightward shift in curve A will:

A) shift curve B upward. 
B) shift curve B downward. 
C) has no effect on curve B 
D) reduce GDP.

Quizplus · Accepted Answer

A rightward shift in curve A, which could represent an increase in aggregate demand, combined with a decrease in interest rates, typically leads to an increase in investment and spending. This would shift curve B, which could represent aggregate supply or GDP, upward as the economy expands.

-Refer to the Above Diagram