Everything else remaining the same,if aggregate demand changes,the amount by which the AD curve shifts depends on
A)the change in aggregate supply.
B)the change in autonomous expenditure and the multiplier.
C)changes in induced expenditure.
D)the change in the price level.
E)none of the above.

Question

Quizplus · Accepted Answer

The amount by which the AD curve shifts depends on the change in autonomous expenditure and the multiplier. This is because the AD curve shows the relationship between aggregate demand and the price level, and a change in autonomous expenditure (such as government spending or investment) will shift the curve. The size of the shift will depend on the size of the multiplier, which determines how much induced expenditure will change in response to the initial change in autonomous expenditure. The other options (changes in aggregate supply, induced expenditure, and the price level) may affect the shape and position of the AD curve, but they do not determine the magnitude of the shift in response to a change in aggregate demand.

Everything Else Remaining the Same,if Aggregate Demand Changes,the Amount by Which