-Refer to the above diagrams. Assuming a constant price level, an increase in aggregate expenditures from AE₁ to AE₂ would: A) move the economy from A to B along AD₁. B) move the economy from B to A along AD₁. C) increase aggregate demand from AD₁ to AD₂. D) decrease aggregate demand from AD₂ to AD₁.

Question

Quizplus · Accepted Answer

An increase in aggregate expenditures shifts the aggregate demand curve to the right, from AD₁ to AD₂, indicating an increase in aggregate demand.

-Refer to the Above Diagrams