When autonomous investment increases, the Aggregate Demand curve will ___. Option 1: Shift parallel downwards Option 2: Shift parallel upwards Option 3: No change Option 4: Swing upwards on y-axis

Answer: Shift parallel upwards. Solution: Aggregate demand is AD = C + I + cY. A rise in autonomous investment I raises the intercept of the AD line without changing its slope (MPC). Hence the AD curve shifts parallel upwards.

Macro

Income & Employment

Easy

When autonomous investment increases, the Aggregate Demand curve will ___________.

Shift parallel downwards

Shift parallel upwards

No change

Swing upwards on y-axis

✅ Correct Option: 2

Aggregate demand is $AD = \bar{C} + \bar{I} + cY$ . A rise in autonomous investment $\bar{I}$ raises the intercept of the AD line without changing its slope (MPC). Hence the AD curve shifts parallel upwards.

2025: 14 May Shift 1

Match List-I with List-II

List–I	List–II
(A) Marginal propensity to consume	(I) ΔS/ΔY
(B) Marginal propensity to save	(II) ΔC/ΔY
(C) Average propensity to consume	(III) S / Y
(D) Average propensity to save	(IV) C / Y

Choose the correct answer from the options given below:

2025: 31 May Shift 1

Among the following, what is assumed as the appropriate justification for taking the price level as fixed?

An economy with unskilled workforce.
An economy having scarcity of resources.
An economy with excess use of resources.
An economy with unused resources.

2022: 30 Aug Shift 2

Match List - I with List - II.

List - I	List - II
(A) MPC (Marginal Propensity to Consume)	(I) $\frac{\Delta Y}{\Delta I}$
(B) MPS (Marginal Propensity to Save)	(II) $\frac{\Delta C}{\Delta Y}$
(C) K (Multiplier)	(III) C + I
(D) AD (Aggregate Demand)	(IV) $\frac{\Delta S}{\Delta Y}$

Choose the correct answer from the options given below :

2023: 20 June Shift 1

MPC stands for.

2025: 15 May Shift 1

Which of the following statement is true?

2025: 29 May Shift 2

Savings are that part of income that is not consumed. What is the marginal propensity to save?

When autonomous investment increases, the Aggregate Demand curve will ___________.

Solution

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