Use the following to answer questions .
Exhibit: Aggregate Demand
-(Exhibit: Aggregate Demand) A movement from point B to point E on could be due to
A) an increase in consumer confidence.
B) an increase in the market interest rate.
C) an increase in personal income taxes.
D) a decrease in transfer payments.

Question

Use the following to answer questions .
Exhibit: Aggregate Demand 
-(Exhibit: Aggregate Demand) A movement from point B to point E on could be due to
A) an increase in consumer confidence. 
B) an increase in the market interest rate. 
C) an increase in personal income taxes. 
D) a decrease in transfer payments.

Quizplus · Accepted Answer

A movement from point B to point E on the aggregate demand curve could be due to an increase in consumer confidence, which would lead to an increase in consumer spending and shift the aggregate demand curve to the right. This would cause a higher equilibrium price level and real GDP. Option B is incorrect because an increase in the market interest rate would result in a movement along the aggregate demand curve, not a shift. Options C and D would lead to a leftward shift of the aggregate demand curve, not a movement along it.

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