The aggregate demand curve would shift to the left if:
A) the cost of energy was to decrease.
B) taxes were increased.
C) the money supply was increased.
D) government spending was increased.

Question

Quizplus · Accepted Answer

An increase in taxes would decrease disposable income, leading to decreased consumer spending, and thus shifting the aggregate demand curve to the left. The decrease in the cost of energy (A) would shift the aggregate supply curve to the right. An increase in the money supply (C) would lead to an increase in aggregate demand. An increase in government spending (D) would also increase aggregate demand.

The Aggregate Demand Curve Would Shift to the Left If