Figure 8-2

-Refer to Figure 8-2.Which of the following would a shift in aggregate demand from AD₀ to AD₁ illustrate?
A)slower growth rates by a major trading partner, combined with an increase in stock market wealth
B)an increase in investment, combined with an increase in imports
C)a reduction in business expectations, combined with the imposition of new tariffs by major trading partners
D)the discovery of new, profitable, technological investment opportunities, combined with inventory levels that have fallen below desired levels

Question

Figure 8-2
 
-Refer to Figure 8-2.Which of the following would a shift in aggregate demand from AD₀ to AD₁ illustrate?
A)slower growth rates by a major trading partner, combined with an increase in stock market wealth 
B)an increase in investment, combined with an increase in imports 
C)a reduction in business expectations, combined with the imposition of new tariffs by major trading partners 
D)the discovery of new, profitable, technological investment opportunities, combined with inventory levels that have fallen below desired levels

Quizplus · Accepted Answer

The shift from AD₀ to AD₁ indicates an increase in aggregate demand. The discovery of new, profitable, technological investment opportunities and low inventory levels would likely boost investment and consumption, leading to an increase in aggregate demand.

Figure 8-2 -Refer to Figure 8-2.Which of the Following Would a Shift