An increase in wealth or an increase in government spending will result in a:
A) left-shift of the aggregate supply curve.
B) right-shift of the aggregate demand curve.
C) right-shift of the aggregate supply curve.
D) movement along the aggregate demand curve.

Question

Quizplus · Accepted Answer

An increase in wealth or government spending will lead to an increase in consumer spending, leading to an increase in aggregate demand. Therefore, there would be a right-shift of the aggregate demand curve.

An Increase in Wealth or an Increase in Government Spending