A leftward shift of the aggregate demand curve can be explained by
A) an increase in raw materials prices.
B) an increase in foreign income.
C) a decline in foreign price levels.
D) inefficient production technology.
E) higher investor optimism.

Question

Quizplus · Accepted Answer

A decline in foreign price levels would increase the buying power of foreign buyers and thus increase their demand for domestically produced goods, causing a leftward shift in the aggregate demand curve. The other options would either cause a rightward shift in the aggregate demand curve or have no effect.

A Leftward Shift of the Aggregate Demand Curve Can Be