Because of dwindling political tensions with China, the U.S. government reduces its expenditures on missiles and jet aircraft. Therefore, the
A) aggregate supply curve shifts to the right
B) aggregate supply curve shifts to the left
C) aggregate demand curve shifts to the right
D) aggregate demand curve shifts to the left

Question

Quizplus · Accepted Answer

Reducing expenditures on missiles and jet aircraft decreases government spending, a component of aggregate demand, leading to a leftward shift in the aggregate demand curve.

Because of Dwindling Political Tensions with China, the U