Which of the following would cause the aggregate expenditures curve to decrease (shift downward)?
A) The value of shares on the stock market increases.
B) Government spending increases.
C) Taxes are reduced.
D) Real interest rates are increased.

Question

Quizplus · Accepted Answer

An increase in real interest rates would cause the aggregate expenditures curve to decrease (shift downward) because higher interest rates make borrowing more expensive, which can reduce consumer spending and business investment.

Which of the Following Would Cause the Aggregate Expenditures Curve