Economics · Macroeconomics
Consider these statements about the Aggregate Demand (AD) curve derived from the IS-LM model under price flexibility: A. The AD curve shifts right if autonomous investment rises. B. The AD curve shifts right if net exports rise in an open economy. C. The AD curve shifts left if money supply contracts. D. As price rises, the LM curve shifts left, moving the economy to a lower income level — this traces the downward slope of the AD curve. Which of the statements given above are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1B and D only
- 2A, B, C and D✓
- 3A and D only
- 4A, B and C only
Correct answer
A, B, C and D
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