A parallel upward shift in the AD curve is caused by an increase in an autonomous component of demand. An increase in autonomous investment raises AD at every level of income, shifting the curve up. A change in MPC would rotate (change slope) the AD curve, not shift it parallelly.
CUET UG 2022 — Economics Macro
2022mcqmedium
Assume a two sector economy in the above diagram, the initial demand curve AD1 shifts upward to AD2 due to :
Official previous-year question
Verified 13 Jul 2026.
Options
- A
Increase in average propensity to save
- B
Increase in aggugate supply
- C
Increase in marginal propensity to consume
- D
Increase in autonomous investment
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