Question
Determine whether the events below will cause the aggregate demand curve to shift to the left or to the right. Assume the price level remains
Determine whether the events below will cause the aggregate demand curve to shift to the left or to the right. Assume the price level remains constant.
a. Government purchases increase by $2 billion. Aggregate demand shifts
(Click to select)
to the right
to the left
.
b. Real interest rates increase. Aggregate demand shifts
(Click to select)
to the left
to the right
.
c. Taxes increase. Aggregate demand shifts
(Click to select)
to the left
to the right
.
d. Aggregate consumption decreases as consumer confidence falls. Aggregate demand shifts
(Click to select)
to the left
to the right
.
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