An increase in investment and government spending can be expected to shift the:
A) Aggregate expenditures curve downward and the aggregate demand curve leftward
B) Aggregate expenditures curve upward and the aggregate demand curve leftward
C) Aggregate expenditures curve downward and the aggregate demand curve rightward
D) Aggregate expenditures curve upward and the aggregate demand curve rightward

Question

Quizplus · Accepted Answer

An increase in investment and government spending would increase aggregate expenditures, shifting the AE curve upward. This increase in aggregate expenditures would then lead to an increase in aggregate demand, shifting the AD curve rightward.

An Increase in Investment and Government Spending Can Be Expected