ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The aggregate demand curve tends to shift to the left when total consumer spending declines. 2 Consumers might spend less because the cost of living is rising or because government taxes have increased. Consumers may decide to spend less and save more if they expect prices to rise in the future.

Detailed explanation-2: -when the government raises taxes, the consumers spend less, so the aggregate demand is less.

Detailed explanation-3: -When the taxes of any individual decrease, his consumption increases, and due to this the aggregate demand curve shifts right. But when the taxes of an individual increase, his consumption decrease as well as the aggregate demand curve shifts to left.

Detailed explanation-4: -When the aggregate demand curve shifts to the left, the total quantity of goods and services demanded at any given price level falls. This can be thought of as the economy contracting.

Detailed explanation-5: -The aggregate demand curve, or AD curve, shifts to the right as the components of aggregate demand-consumption spending, investment spending, government spending, and spending on exports minus imports-rise. The AD curve will shift back to the left as these components fall.