ECONOMICS
AGGREGATE DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
a decrease in wealth
|
|
|
pessimistic consumer expectations
|
|
|
a decrease in the existing stock of capital
|
|
|
contractionary fiscal policy
|
|
|
a decrease in the quantity of money
|
Detailed explanation-1: -The aggregate demand 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: -If households become more optimistic about their future incomes, the aggregate demand curve will shift to the right. when the price level falls, the real value of household wealth rises, and so will consumption.
Detailed explanation-3: -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.
Detailed explanation-4: -The aggregate supply curve shifts to the right as productivity increases or the price of key inputs falls, making a combination of lower inflation, higher output, and lower unemployment possible.
Detailed explanation-5: -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.