Question

An increase in which of the following (assuming the increase was not due to a price level change) shifts aggregate demand to the right?

a. consumption
b. investment
c. government expenditures
d. All of the above are correct.

Answer 1

An increase in consumption, investment, or government expenditures can shift aggregate demand to the right. option d.

Step-by-step explanation:

A shift of the AD curve to the right means that at least one of the components of aggregate demand increased, leading to a greater amount of total spending at every price level. In this case, an increase in consumption, investment, or government expenditures can shift the aggregate demand to the right. For example, if consumers start spending more, businesses will increase production and investment, leading to an increase in aggregate demand. Similarly, if the government increases its spending on public projects, it will stimulate economic activity and contribute to the rightward shift of aggregate demand.