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)potential GDP.

Question

Quizplus · Accepted Answer

The shift in the AD curve depends on the change in autonomous expenditure and the multiplier. Autonomous expenditure refers to expenditure that is not influenced by changes in income, such as investment, government spending, and exports. When autonomous expenditure increases, the AD curve shifts to the right, and when it decreases, the AD curve shifts to the left. The multiplier refers to the magnification effect of changes in autonomous expenditure on overall output and income in the economy.

Everything Else Remaining the Same, If Aggregate Demand Changes, the Amount