Which of the following events would most likely reduce aggregate demand?
A) a reduction in the amount of existing capital stock
B) a reduction in business and personal tax rates
C) an increase in expected returns on investment
D) an increase in real interest rates

Question

Quizplus · Accepted Answer

An increase in real interest rates would likely decrease aggregate demand as it would make borrowing more expensive, reducing consumption and investment spending.

Which of the Following Events Would Most Likely Reduce Aggregate