Refer to the information provided in Figure 32.2 below to answer the question(s) that follow. Figure 32.2 -Refer to Figure 32.2. 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 Keynes, an increase in government spending or an increase in money supply will shift the aggregate demand (ADS) curve to the right (AD₁). Therefore, the correct answer is C.

Refer to the Information Provided in Figure 32