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

Question

Quizplus · Accepted Answer

The aggregate demand curve shifts rightward by more than $1 million due to the multiplier effect, where an initial increase in spending leads to further increases in income and consumption, amplifying the initial impact on aggregate demand.

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