curve.

-The figure illustrates aggregate demand and aggregate supply in Sparta. Which of the following events will decrease Spartaʹs real GDP in the short run?
A) a fall in resource prices
B) a decrease in government expenditure
C) an increase in investment
D) a decrease in taxes

Question

curve.
 
-The figure illustrates aggregate demand and aggregate supply in Sparta. Which of the following events will decrease Spartaʹs real GDP in the short run?
A) a fall in resource prices 
B) a decrease in government expenditure 
C) an increase in investment 
D) a decrease in taxes

Quizplus · Accepted Answer

According to the figure, a decrease in government expenditure will shift the aggregate demand curve to the left, resulting in a decrease in real GDP in the short run. A fall in resource prices (choice A) will shift the aggregate supply curve to the right, leading to an increase in real GDP. An increase in investment (choice C) and a decrease in taxes (choice D) will also shift the aggregate demand curve to the right, resulting in an increase in real GDP in the short run.

Curve. -The Figure Illustrates Aggregate Demand and Aggregate Supply in Sparta