Which of the following statements is correct? I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases total planned real spending on domestic goods shifts the AD curve to the right.

Question

Jasiah Yu

Business

2 October, 17:08

Which of the following statements is correct? I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases total planned real spending on domestic goods shifts the AD curve to the right.

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Answers (1)

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Deandre Good · Answer 1

Answer: II. Any non-price-level change that increases total planned real spending on domestic goods shifts the AD curve to the right.

Explanation:

Aggregate demand is the amount of total spending on domestic goods and services in an economy.

The aggregate demand curve, or AD curve, shifts to the right as the components of aggregate demand-consumption spending, investment spending, government spending, and spending on exports minus imports-rise. The AD curve will shift back to the left as these components fall.