Question

QUESTION 10 5 points Save A In the graph below, line S shifts from its initial position of So to its final position at S1. Line So, at its initial position, intersects line D at point A. After the shift from So to S1 the point of intersection shifts to point B. As you shift from the intersection at point A to the intersection at point B, how does the quantity change? S. Price Quantity ncreases decreases remains the same

Answer 1

Solution to question 10 and question 11:

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In the graph given, as line S shifts from its initial position of S0 to its final position at S1;the intersection with line D shifts from point A to point B and quantity decreases (as depicted by black arrow) and the price increases (as depicted by green arrow).

Solution to question 12:

Along the 45 degree line the value along X – axis equals the values along the Y- axis. So in this case, GDP equals private spending at all points along the 45 degree line as can be seen through dotted red lines.

So the answer is option C.