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. (A) would be equal to (B) would be greater than (C) would be less than (D) may be greater than or less than
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This shift represents the total change in aggregate demand. So, when government purchases increase by $50 billion, it will cause a shift in the aggregate demand curve from AD1 to AD2. Now, let's look at the distance from point A to point B. This distance Show more…
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