In a macro model with a constant price level,an increase in autonomous desired consumption will cause the AE curve to shift
A)downward and the AD curve to shift to the left.
B)downward and the AD curve to shift to the right.
C)upward and the AD curve to shift to the left.
D)upward and the AD curve to shift to the right.
E)upward and a movement to the right along the AD curve.

Question

Quizplus · Accepted Answer

An increase in autonomous desired consumption will directly increase consumption, which is a component of aggregate demand (AD). This will shift the AD curve to the right, resulting in an upward and rightward shift.

In a Macro Model with a Constant Price Level,an Increase