All of the following would cause the aggregate demand curve to shift EXCEPT
A) a rise in real interest rates.
B) an increase in taxes.
C) improvements in economic conditions in other countries.
D) a decrease in the price level.

Question

Quizplus · Accepted Answer

A decrease in the price level would cause movement along the aggregate demand curve rather than a shift of the curve. On the other hand, a rise in real interest rates (A) would decrease consumption and investment spending, shifting the aggregate demand curve leftward, and an increase in taxes (B) would decrease disposable income, shifting the aggregate demand curve leftward. Additionally, improvements in economic conditions in other countries (C) would increase exports and shift the aggregate demand curve rightward.

All of the Following Would Cause the Aggregate Demand Curve