Refer to the information provided in Figure 17.2 below to answer the questions that follow. Figure 17.2 -Refer to Figure 17.2. According to Keynes, an increase in government spending or an increase in money supply will A) shift AS₁ to the right. B) shift LRAS to the right. C) shift AD₁ to the right. D) shift AD₁ to the left.

Question

Quizplus · Accepted Answer

According to Figure 17.2, an increase in government spending or an increase in money supply will shift the Aggregate Demand (AD₁) to the right. This is because an increase in government spending or an increase in money supply will increase consumption, investment, and net exports, leading to an increase in overall demand.

Refer to the Information Provided in Figure 17