Question

What would cause the aggregate demand curve shift upward?

Answer 1

An increase in (i) autonomous expenditure, (ii) private investment expenditure and (iii) Government expenditure will shift the Aggregate Demand curve to shift upwards.

Explanation:

Look at the graph. C+ I + G is the aggregate demand curve.

A is the autonomous consumption. Since we have assumed stable consumption function. An increase in any one of these factors i.e., A, I and G will cause the aggregate curve to shift upwards.