Arrange the values of the following in ascending order (lowest to highest).
A. Thus ,it causes AD and output to increase by an amount larger than initial increment
B. Consequently, AD line shift parallel upward
C. Suppose, the autonomous investment increases in the economy
D. There is an emergence of excess demand in the economy
Choose the correct sequence from the options given below:
Arrange the values of the following in ascending order (lowest to highest).
A. Thus ,it causes AD and output to increase by an amount larger than initial increment
B. Consequently, AD line shift parallel upward
C. Suppose, the autonomous investment increases in the economy
D. There is an emergence of excess demand in the economy
Choose the correct sequence from the options given below:
Solution
The multiplier chain runs: autonomous investment rises (C), so the AD line shifts parallel upward (B), creating excess demand at the old equilibrium income (D); output then rises repeatedly through induced consumption until AD and output increase by a multiple of the initial increment (A). Sequence: C, B, D, A.
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