ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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fall in private consumption expenditure
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fall in exports
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fall in imports
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fall in government expenditure
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Detailed explanation-1: -Increasing any of these components shifts the AD curve to the right, leading to a greater real GDP and to upward pressure on the price level. Decreasing any of the components shifts the AD curve to the left, leading to a lower real GDP and a lower price level.
Detailed explanation-2: -A change in inflation changes the level of prices in the economy and thereby cause a movement along the AD curve rather than a shift. Therefore, the correct option is D, an increase in inflation.
Detailed explanation-3: -The correct answer is A) Sales tax receipts. In the above-given statement, sales tax receipts are not included in the aggregate demand components.
Detailed explanation-4: -Aggregate demand consists of all consumer goods, capital goods, exports, imports, and government spending programs.