Suppose consumption increases at each price level.As a result,aggregate demand __________,and the AD curve shifts __________.
A) increases; leftward
B) decreases; leftward
C) increases; rightward
D) decreases; rightward

Question

Quizplus · Accepted Answer

If consumption increases at each price level, it means that consumers are willing and able to spend more at every level of prices. This will result in an increase in aggregate demand, as AD represents the total amount of goods and services that consumers, firms, the government, and foreign buyers are willing and able to purchase at different price levels. Therefore, the AD curve shifts rightward, indicating that at any given price level, there is a higher demand for goods and services.

Suppose Consumption Increases at Each Price Level