If investment spending increases by $1 million, then the aggregate demand curve shifts
A)leftward by more than $1 million.
B)rightward by $1 million.
C)rightward by more than $1 million.
D)leftward by less than $1 million.
E)rightward by less than $1 million.

Question

Quizplus · Accepted Answer

An increase in investment spending leads to a multiplied increase in aggregate demand due to the multiplier effect, shifting the curve rightward by more than the initial increase.

If Investment Spending Increases by $1 Million, Then the Aggregate