A rightward shift in the aggregate demand curve can be caused by:
A) an increase in government spending.
B) an increase in the money supply.
C) a decrease in taxes.
D) all of the above

Question

Quizplus · Accepted Answer

All of the choices can cause a rightward shift in the aggregate demand curve. An increase in government spending would increase aggregate demand directly. An increase in the money supply would lower interest rates and increase borrowing, leading to increased spending and therefore increased aggregate demand. A decrease in taxes would increase disposable income and therefore increase consumer spending, leading to increased aggregate demand.

A Rightward Shift in the Aggregate Demand Curve Can Be