If the economy experiences an increase in aggregate demand leading to higher price levels and output, what is the most likely underlying cause of this shift in the aggregate demand curve?

When the economy sees an increase in aggregate demand, it means that consumers, businesses, and the government are all wanting to buy more goods and services. This can happen for several reasons, such as lower interest rates that make borrowing cheaper, or increased consumer confidence that encourages people to spend more. For example, if people feel secure in their jobs and expect their incomes to rise, they may spend more on things like cars and homes. As demand for these products increases, businesses respond by raising their prices and producing more, which leads to higher overall price levels and output in the economy. Therefore, the most likely underlying cause of this shift in the aggregate demand curve is an increase in spending due to factors that boost confidence and reduce borrowing costs.