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, a(n) ________ will shift AD₁ to the right. A) increase in taxes B) decrease in the money supply C) increase in government spending D) all of the above

Question

Quizplus · Accepted Answer

According to Keynes, an increase in government spending will shift the aggregate demand curve (AD₁) to the right. An increase in taxes and a decrease in the money supply will have the opposite effect, shifting the curve to the left. Therefore, the best choice is C – increase in government spending.

Refer to the Information Provided in Figure 17