An increase in autonomous investment causes the ____ and _____ curves to shift to the right.
A) IS, LM
B) IS, AD
C) LM, AD
D) none of the above

Question

Quizplus · Accepted Answer

An increase in autonomous investment increases aggregate demand, shifting the AD curve to the right. It also increases the level of income and output for any given interest rate, shifting the IS curve to the right. The LM curve, which represents the relationship between the liquidity preference and money supply in the economy, is not directly affected by changes in investment.

An Increase in Autonomous Investment Causes the ____ and _____

An Increase in Autonomous Investment Causes the and _