-The figure above illustrates aggregate demand and aggregate supply in Sparta. Sparta's price level will rise above 100 if .
A) the quantity of capital increases
B) the quantity of money increases
C) government expenditure decreases
D) taxes increase

Question

-The figure above illustrates aggregate demand and aggregate supply in Sparta. Sparta's price level will rise above 100 if .
A) the quantity of capital increases 
B) the quantity of money increases 
C) government expenditure decreases 
D) taxes increase

Quizplus · Accepted Answer

An increase in the quantity of money typically leads to higher aggregate demand, which can cause the price level to rise above 100.

-The Figure Above Illustrates Aggregate Demand and Aggregate Supply in Sparta