An increase in investment activity
A) causes the aggregate demand curve to shift to the right.
B) causes the aggregate demand curve to shift to the left.
C) causes no change in the aggregate demand curve but causes the price- adjustment schedule to climb.
D) causes no change in the aggregate demand curve but causes the price- adjustment schedule to fall.
E) causes a change in the aggregate demand curve that cannot be defined precisely with the information provided.

Question

Quizplus · Accepted Answer

An increase in investment activity increases overall spending in the economy, which in turn increases aggregate demand. This is represented by a rightward shift of the aggregate demand curve.

An Increase in Investment Activity