If aggregate demand just increased,which of the following may have caused the increase?
A)an increase in government purchases
B)an increase in the interest rate
C)an increase in the price level
D)an increase in imports

Question

Quizplus · Accepted Answer

An increase in government purchases would lead to an increase in aggregate demand, as government spending is one component of aggregate demand. An increase in interest rates would likely decrease aggregate demand, as borrowing and spending would become more expensive. An increase in the price level would not increase aggregate demand, but rather decrease it, as purchasing power would decrease. An increase in imports would not increase aggregate demand either, as this would represent an outflow of money from the domestic economy.

If Aggregate Demand Just Increased,which of the Following May Have