-In the above figure, the shift from AE₀to AE₁might have been caused by A) an increase in the price level. B) an increase in the real interest rate. C) an increase in government expenditures. D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

An increase in government expenditures would shift the aggregate expenditure curve from AE₀ to AE₁ as it increases overall spending in the economy.

-In the Above Figure, the Shift from AE0 to AE1

-In the Above Figure, the Shift from AE₀to AE₁