Which of the following shifts aggregate demand to the left?
A) an increase in the bank rate
B) an increase in the price level
C) an increase in the money supply
D) a decrease in interest rates

Question

Quizplus · Accepted Answer

An increase in the bank rate would lead to an increase in interest rates, making borrowing more expensive and decreasing consumer and investment spending. This would shift aggregate demand to the left. An increase in the price level (option B) would shift aggregate supply to the left, while an increase in the money supply (option C) or a decrease in interest rates (option D) would shift aggregate demand to the right.

Which of the Following Shifts Aggregate Demand to the Left