Graphically, Aggregate Demand (AD) function can be obtained by vertically adding the ________ and ________.

Option 1 -> Consumption and investment are components of aggregate demand that are vertically added.

Option 2 -> Savings is not a component of aggregate demand; it's a leakage from the circular flow.

Option 3 -> Savings is not part of aggregate demand; only spending components are included.

Option 4 -> Aggregate supply is separate from aggregate demand; it's not added to get AD.

Hence, Option 1: consumption, investment -> In Keynesian economics, the Aggregate Demand (AD) function is derived by vertically summing all spending components. In a simple two-sector model, we start with the consumption function (C) and then vertically add the investment function (I) to obtain the AD curve (C + I). Graphically, this means at each level of income, we add the value of investment spending to consumption spending. In more complex models, government spending (G) and net exports (NX) are also added vertically to complete the full AD = C + I + G + NX. -> correct