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Use the Following Diagram to Answer the Following Questions

Question 89

Multiple Choice

Use the following diagram to answer the following questions.
Use the following diagram to answer the following questions. -Refer to Diagram 13-1. Suppose the economy is currently in equilibrium at point A. If government increases spending, this would most likely: A) shift aggregate demand from AD₁ to AD₂. B) shift aggregate demand from AD₁ to AD<sub>3</sub>. C) cause unemployment. D) cause the equilibrium level of real GDP and the equilibrium price level to fall.
-Refer to Diagram 13-1. Suppose the economy is currently in equilibrium at point A. If government increases spending, this would most likely:


A) shift aggregate demand from AD₁ to AD₂.
B) shift aggregate demand from AD₁ to AD3.
C) cause unemployment.
D) cause the equilibrium level of real GDP and the equilibrium price level to fall.

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