ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the below events would not shift the AD curve?
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A change in the general price level
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An increase in income tax rates
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A fall in the value of the currency
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Higher interest rates
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Explanation:
Detailed explanation-1: -A change in the price of the product leads to movement along the demand curve and not a shift in the demand curve.
Detailed explanation-2: -Answer and Explanation: The correct option is: d. Changes in production technology.
Detailed explanation-3: -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.
Detailed explanation-4: -Along the AD curve, real GDP increases and the price level decreases. In other words, AD slopes down. Changes in the price level will cause a movement along the AD curve.
There is 1 question to complete.