Arrange the following statements when autonomous investment increases..

(A) The autonomous expenditure increases.

(B) Aggregate demand and output have a multiplier effect.

(C) Income and output increases.

(D) The aggregate demand curve shifts parallel upward.

Choose the correct answer from the options given below:

Option 1 -> When autonomous investment increases: (A) Autonomous expenditure increases first, (D) AD curve shifts upward, (C) Income/output increases, (B) Multiplier effect occurs.

Option 2 -> Incorrect sequence: places multiplier effect (B) before the AD curve shift (D).

Option 3 -> Incorrect sequence: starts with multiplier effect (B) before autonomous expenditure increase (A).

Option 4 -> Incorrect sequence: starts with income increase (C) before autonomous expenditure increase (A).

Hence, Option 1: (A), (D), (C), (B) -> The logical chain of events is: First, autonomous investment increases autonomous expenditure (A). This causes the aggregate demand curve to shift parallel upward (D) since autonomous spending is independent of income. The higher aggregate demand leads to increased production, raising income and output (C). Finally, through the multiplier mechanism, this initial increase generates further rounds of spending and income, creating a multiplied effect on aggregate demand and output (B). -> correct