Figure 16-11
-Refer to Figure 16-11.In the graph above,the shift from AD1 to AD2 represents the total change in aggregate demand.If government purchases increased by $50 billion,then the distance from point A to point B ________ $50 billion.

Question

Figure 16-11 
-Refer to Figure 16-11.In the graph above,the shift from AD1 to AD2 represents the total change in aggregate demand.If government purchases increased by $50 billion,then the distance from point A to point B ________ $50 billion.

Quizplus · Accepted Answer

The distance from point A to point B would be greater than $50 billion because an increase in government purchases leads to a multiplied effect on aggregate demand due to the multiplier effect.

Figure 16-11 -Refer to Figure 16-11.In the Graph Above,the Shift from AD1