An increase in investment spending results in a the aggregate expenditure curve and
The aggregate demand curve.

Question

Quizplus · Accepted Answer

An increase in investment spending represents an increase in one of the components of aggregate expenditure (i.e. C + I + G + NX). This leads to a shift in the aggregate expenditure curve, as the new level of investment spending affects the overall level of spending in the economy. Additionally, since aggregate demand (AD) is the total spending in the economy at a given price level, an increase in investment spending will also result in a shift in the AD curve. This is because AD is the sum of consumption, investment, government spending, and net exports, so an increase in investment spending will increase the overall level of AD at each price level.

An Increase in Investment Spending Results in a the Aggregate