Consider an open economy with a government. A sustained increase in the nation's overall income will cause a parallel upward shift in the aggregate demand curve because both government spending and exports are assumed to rise automatically with income.
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In a country's economy, which of the following scenarios would be classified as a change in an autonomous component of aggregate demand, leading to a parallel shift of the entire demand curve?
Consider an open economy with a government. A sustained increase in the nation's overall income will cause a parallel upward shift in the aggregate demand curve because both government spending and exports are assumed to rise automatically with income.
Analyzing Economic Shocks
Analyzing an External Economic Event
Match each economic scenario with the autonomous component of aggregate demand it would most directly affect, causing a parallel shift in the aggregate demand curve.