Multiple Choice
-The rightward shift of the aggregate demand (AD) curve,from AD1 to AD2,shown in the diagram above may be caused by a(n)
A) increase in consumption induced by an increase in national income.
B) increase in consumption induced by a fall in the price level.
C) increase in consumption induced by a rise in real wealth due to a fall in the price level.
D) increase in autonomous consumption.
E) decrease in private investment induced by a fall in the interest rate due to a fall in the price level.
Correct Answer:
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