An increase in aggregate demand is 0 A a movement from one p

An increase in aggregate demand is: 0 A) a movement from one point to another on a given A B) a shift to the left of the AD curve C) a shift to the right of the AD curve; Save

Solution

Answer 1: An increase in aggregate demand result in shift to the right of the AD curve.It means that demand has been increased and reach up to the right.

Answer 2: An increase in taxes will decreases aggregate demand. As consumption has been decreased when taxes increases.

Answer 3: If the economy is in recession it can be self corrected when SRAS increases. It means to overcome recession economy has to covered off.

Answer 4 : Suppose that economy is in long run equilibrium it means when there is decrease in aggregate demand effect real GDP and price level also decreases.

Answer 6: Expansionary fiscal policy resulted in increasing aggregate demand as government spending increase or decrease taxes.