Exhibit 14-3 Aggregate supply and demand curves

-In Exhibit 14-3 which of the following is not consistent with a shift in the aggregate demand curve from AD₁ to AD₂?
A)A decrease in consumer spending.
B)An increase in investment.
C)An increase in government spending.
D)An increase in net exports.

Question

Exhibit 14-3 Aggregate supply and demand curves
 
-In Exhibit 14-3 which of the following is not consistent with a shift in the aggregate demand curve from AD₁ to AD₂?
A)A decrease in consumer spending. 
B)An increase in investment. 
C)An increase in government spending. 
D)An increase in net exports.

Quizplus · Accepted Answer

A decrease in consumer spending would cause a shift to the left in the aggregate demand curve, not a shift to the right from AD₁ to AD₂. Increases in investment, government spending, and net exports would all cause a shift to the right in the aggregate demand curve.

Exhibit 14-3 Aggregate Supply and Demand Curves