Long description

This diagram has Aggregate Demand (AD) on the vertical axis and Income (Y) on the horizontal axis.

A solid line at a 45 degree angle is drawn upwards from the origin.

From a short way up the vertical axis, a straight line is drawn, sloping upwards at an angle shallower than 45 degrees. This line is labelled as C+I+G zero and it intersects the 45 degree line quite low down. A dashed line is drawn from this intersection point down to the horizontal Income axis.

From a point about half way up the vertical axis, a second straight line is drawn. This is parallel to the first one and is labelled as C+I+G1. This intersects the 45 degree line much further along. A dashed line is drawn from this intersection point down to the horizontal Income axis. This point is much further along the axis than the point from the first aggregate demand schedule.

There are two arrows in blue showing the direction of change. One arrow points upward along the vertical axis, from the lower to the higher aggregate demand schedule. This has £300m written beside it.

Another arrow runs to the right along the horizontal axis, from the lower point on the axis to the higher point. This has £600m written beside it.