Everything else held constant if there is an autonomous increase in wealth, aggregate _____ shifts to...

Everything else held constant if there is an autonomous increase in wealth, aggregate _____ shifts to the _____.

	supply; left
	supply; right
	demand; left
	demand; right

Solutions

Expert Solution

Ans.- (D)

An increase in autonomous wealth leads to a higher aggregate demand which in turn shifts AD curve to the right. Think of it like if everyone has more wealth, everyone will spend more and therefore aggregate demand will automatically increase.

Rahul Sunny answered 1 year ago

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