ECONOMICS
AGGREGATE DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
An increase in the income tax rate
|
|
|
An increase in exports
|
|
|
A decrease in the price level
|
|
|
A decrease in household income
|
|
|
A decrease in government spending
|
Detailed explanation-1: -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.
Detailed explanation-2: -Which of the following will result in a rightward shift of the aggregate demand curve? An increase in exports (a component of aggregate demand) will shift the aggregate demand curve to the right.
Detailed explanation-3: -The aggregate demand curve will shift rightward when there is: the expectation that future consumer income will rise.
Detailed explanation-4: -Lower production costs will increase the aggregate supply in the economy. The aggregate supply curve will shift to the right.
Detailed explanation-5: -Which factor would shift the Aggregate Demand curve to the right? a fall in interest rates which increases investment.