Final answer:
In macroeconomics, increased spending or improvements in technology typically shift the Aggregate Demand or Aggregate Supply curves to the right, representing economic expansion or increased production efficiency, respectively. These shifts can help pull an economy out of a recession if it's below potential GDP, but can be inflationary if above potential GDP.
Step-by-step explanation:
In a Type 1 movement on the macro model, scenario (a) where an increase in total spending causes a movement upward and to the right is generally associated with a shift in the Aggregate Demand (AD) curve. Economic policies such as a surge in military spending, tax cuts focused on business investment, or increased government spending on healthcare can shift the AD curve to the right, leading to economic growth if the real GDP is below potential GDP. Conversely, these policies can be inflationary if real GDP already exceeds potential GDP, further shifting the AD curve to the right.
Similarly, scenario (c), where an increase in the capability and incentive to produce (like advancements in technology or a reduction in production costs) leads to a movement downward and to the right, reflects an increase in Aggregate Supply (AS). An improved technology that reduces costs shifts the AS curve to the right, indicating a more efficient production capability in the economy. Lastly, changes such as advances in product quality or an increase in the need for goods can cause a rightward shift in demand, showing an increase in consumer preferences for these goods.