Which of the following scenarios would likely cause the aggregate demand curve to shift to the right?
A) Consumer confidence increases.
B) The government issues a tax credit for small businesses.
C) The government builds new highways.
D) All of these would likely cause the aggregate demand curve to shift to the right.

Question

Quizplus · Accepted Answer

All of the given scenarios have the potential to increase aggregate demand. 
A) If consumer confidence increases, individuals are more likely to spend money, leading to an increase in consumption expenditure, which is a component of aggregate demand.
B) If the government issues a tax credit for small businesses, the businesses may invest more, which will lead to an increase in investment expenditure, another component of aggregate demand.
C) If the government builds new highways, this creates jobs and increases government spending, leading to an increase in aggregate demand.

Which of the Following Scenarios Would Likely Cause the Aggregate