Exhibit 16-5 Money, investment and product markets

In Exhibit 16-5, a shift in aggregate demand from AD₂ to AD₃:

Question

Exhibit 16-5 Money, investment and product markets In Exhibit 16-5, a shift in aggregate demand from AD₂ to AD₃:

Quizplus · Accepted Answer

A shift in aggregate demand from AD₂ to AD₃ indicates an increase in aggregate demand, which will lead to an increase in real GDP and a rise in the price level. This is because as demand for goods and services increases, firms will increase production to meet the demand, which leads to an increase in output and prices.

Exhibit 16-5 Money, Investment and Product Markets