Which of the following shifts aggregate demand to the left?
A)an increase in the price level
B)a decrease in the money supply
C)an increase in net exports
D)Congress passes a new investment tax credit

Question

Quizplus · Accepted Answer

A decrease in the money supply will shift aggregate demand to the left, as it reduces the purchasing power of consumers and businesses. A higher interest rate resulting from the decreased money supply further discourages borrowing and spending, resulting in lower aggregate demand. The other options listed either have no impact on aggregate demand or actually increase it.

Which of the Following Shifts Aggregate Demand to the Left