Use the following to answer questions :
Figure 16-1
-What type of event could move the economy from point E to G in Figure 16-1?
A)A tax which redistributes income from rich to poor.
B)Massive highway construction
C)Tax on rich which subsidizes income support programs.
D)A and B
E)A and C

Question

Use the following to answer questions :
Figure 16-1 
-What type of event could move the economy from point E to G in Figure 16-1?
A)A tax which redistributes income from rich to poor. 
B)Massive highway construction 
C)Tax on rich which subsidizes income support programs. 
D)A and B 
E)A and C

Quizplus · Accepted Answer

Both a tax that redistributes income from rich to poor and a tax on the rich that subsidizes income support programs could potentially move the economy from point E to G by increasing aggregate demand through higher spending by lower-income individuals who have a higher marginal propensity to consume.

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