In general, an increase in autonomous expenditure that is NOT created by a change in the price level results in a
A) movement upward along the AD curve.
B) leftward shift of the AD curve.
C) rightward shift of the AD curve.
D) movement downward along the AD curve.

Question

Quizplus · Accepted Answer

An increase in autonomous expenditure not caused by a change in the price level, such as an increase in government spending or investment, will shift the AD curve to the right. This is because at any given price level, there will be more demand for goods and services due to the increase in autonomous expenditure.

In General, an Increase in Autonomous Expenditure That Is NOT