-The aggregate demand curve in the figure above shifts rightward if
A) potential GDP increases.
B) the money wage rate falls.
C) government expenditure decreases.
D) taxes are hiked.
E) the expected future profit increases so that investment increases.

Question

-The aggregate demand curve in the figure above shifts rightward if
A) potential GDP increases. 
B) the money wage rate falls. 
C) government expenditure decreases. 
D) taxes are hiked. 
E) the expected future profit increases so that investment increases.

Quizplus · Accepted Answer

An increase in expected future profits boosts investment, which increases aggregate demand, causing the aggregate demand curve to shift rightward.

-The Aggregate Demand Curve in the Figure Above Shifts Rightward