All of the following actions shift the aggregate demand curve to the right EXCEPT
A)the Fed raises the interest rate.
B)an increase in government transfer payments.
C)inflation is expected to rise next year.
D)an increase in expected future profit.
E)a decrease in taxes.

Question

Quizplus · Accepted Answer

When the Fed raises the interest rate, it discourages borrowing and spending, which decreases aggregate demand. The other choices all increase spending or expectations of future spending, which shift the aggregate demand curve to the right.

All of the Following Actions Shift the Aggregate Demand Curve