A shift of the AD curve
A)to the right is considered expansionary, and a shift to the left is considered contractionary.
B)to the left is considered expansionary, and a shift to the right is considered contractionary.
C)to the right or to the left is considered contractionary.
D)to the right or to the left is considered expansionary.

Question

Quizplus · Accepted Answer

A shift of the AD curve to the right indicates an increase in aggregate demand, leading to an expansionary effect on the economy. On the other hand, a shift of the AD curve to the left indicates a decrease in aggregate demand, leading to a contractionary effect on the economy. Hence, option A is the correct choice.

A Shift of the AD Curve