Question

When investment increases

O A. aggregate supply increases. The increase in aggregate supply is greater than the increase in investment because capital inc

O B. aggregate demand increases by an amount equal to the increase in investment

O c. aggregate demand increases and aggregate supply increases

OD. aggregate demand increases and income increases. The increase in income induces an increase in consumption expenditu

Answer 1

Option D is correct.

Step-by-step explanation:

When investment​ increases, aggregate demand increases and income increases. The increase in income induces an increase in consumption expenditure so aggregate demand increases by more than the initial increase in investment.

Aggregate demand is an economic measurement of the total amount of demand for all finished goods and services produced in an economy. Aggregate demand is expressed as the total amount of money exchanged for those goods and services at a specific price level and point in time.