When a nonprice change affects any of the four components of GDP, the:
A) aggregate demand curve will shift.
B) economy will move up or down along the aggregate demand curve.
C) aggregate demand curve will remain unaffected.
D) aggregate supply curve will shift.

Question

Quizplus · Accepted Answer

A nonprice change affecting any of the four components of GDP (consumption, investment, government spending, and net exports) will shift the aggregate demand curve because it will affect the total amount of goods and services demanded in the economy at any given price level. A change in aggregate demand will then impact the equilibrium output and price level in the economy.

When a Nonprice Change Affects Any of the Four Components