Which of the following will decrease aggregate demand, thereby shifting the curve left?
A) Government spending on interest payments increases.
B) The personal income tax increases.
C) The government's discretionary spending increases.
D) The money supply increases.

Question

Quizplus · Accepted Answer

An increase in the personal income tax reduces consumers' disposable income, leading to a decrease in consumer spending, which in turn decreases aggregate demand.

Which of the Following Will Decrease Aggregate Demand, Thereby Shifting