Question

What could have caused the aggregate demand curve to shift to the right from AD1 to AD2 an increase in exports an increase in imports?

Answer 1

Answer: an increase in export

Explanation:

Aggregate Demand can be defined as the total value of all expenditure of consumers in the economy at a given period of time. It is the sum of money consumers plan to spend on an output at a given period of time in an economy. The Aggregate demand gives the value of goods and services that will be demanded by the consumers at a given price in an economy. The Aggregate demand consist of consumption and investment and government spending in a model of the economy.

The Aggregate demand will shift to the right when there is an increase in the spending on domestic goods of a country. The Aggregate demand will also shift to the right when there is an increase in export of a country. The Aggregate demand equation can be written as

AD = C + I + G + ( X - M) where C = consumption, I = investment, G = Government, X = Export, M = Import