Consider the AD Curve in the Simple Macro Model

question 44

Multiple Choice

Consider the AD curve in the simple macro model.Suppose there is an increase in autonomous desired consumption at a given price level.The result is

• A)the AE curve shifts downward and the AD curve shifts to the left.
• B)the AE curve shifts downward and the AD curve shifts to the right.
• C)the AE curve shifts upward and the AD curve shifts to the left.
• D)the AE curve shifts upward and the AD curve shifts to the right.
• E)no change in either the AE or the AD curve.

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Definitions:

Lowest Terms

A fraction in which the numerator and denominator have no common factors other than 1, making it the simplest form of the fraction.

Decimal

A system of numbers based on powers of ten, incorporating a point to separate the integer part from the fractional part of a number.

Lowest Terms

The simplest form of a fraction, where the numerator and the denominator are reduced to their smallest values.

Arabic Numerals

A widely used numerical system that includes the digits 0 through 9, originated in India and later adopted by the Arab world.