Consider the relationship between the AE curve and the AD curve.A rise in the amount of desired consumption,investment,government purchases,or net exports at any given level of national income
A)shifts the AD curve to the left.
B)shifts the AD curve to the right.
C)causes a movement along the AD curve.
D)causes a movement along the AE curve.
E)causes a shift of the AE curve but no movement of the AD curve.

Question

Quizplus · Accepted Answer

An increase in desired consumption, investment, government purchases, or net exports at a given level of national income would shift the AE curve upwards, which would then result in a higher level of aggregate demand (AD) at every price level. Therefore, the AD curve would shift to the right.

Consider the Relationship Between the AE Curve and the AD