Answer Happy

Use the graph below to answer the questions that follow. Price Level Aggregate Demand F Real GDP G AD 3 AD₁ AD 2

For each of the following scenarios, determine the effect on aggregate demand. a. Foreign nations experience an increase in the income of citizens. This results in a O movement from point F to point G. O movement from point G to point F. shift from AD₁ to AD3. shift from AD1 to AD2. b. The purchasing power of the dollar decreases (or depreciates). This results in a O movement from point G to point F. O movement from point F to point G. Oshift from AD1 to AD2. O shift from AD1 to AD3. c. The price level in the economy decreases. This results in a O movement from point F to point G. O movement from point G to point F. shift from AD1 to AD3. O shift from AD1 to AD2. d. The government reduces spending on infrastructure. This results in a shift from AD₁ to AD3. O shift from AD₁ to AD2. movement from point F to point G. O movement from point G to point F.