Practicing Success
In the given figure what will happen to aggregate demand curve (AD) when autonomous investment increases. |
AD curve shifts in parallel downwards AD curve does not shift AD curve shifts in parallel upwards AD curve shifts not in parallel upwards |
AD curve shifts in parallel upwards |
The correct answer is option (3) : AD curve shifts in parallel upwards Explanation : when autonomous investment increases, it leads to an increase in aggregate demand. This shift is typically represented as an upward parallel shift of the aggregate demand (AD) curve. |