Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

The aggregate demand line shifts parallel upwards. The reason behind this is :

Options:

Autonomous Investment increase

Autonomous Investment decreases

Investment is Zero

Investment is Negative

Correct Answer:

Autonomous Investment increase

Explanation:

The reason behind the aggregate demand line shifting parallel upwards is: Autonomous Investment increase.

An increase in autonomous investment, which refers to the amount of investment that does not depend on the level of income, can lead to an upward shift in the aggregate demand line. This means that at any given level of income, the total spending in the economy increases, leading to a parallel upward shift in the aggregate demand curve.