-Which of the following would cause an increase in aggregate demand (AD)?
A) a decrease in price levels
B) an increase in interest rates
C) a decrease in taxes
D) a rise in the foreign exchange value of the dollar

Question

-Which of the following would cause an increase in aggregate demand (AD)?
A) a decrease in price levels 
B) an increase in interest rates 
C) a decrease in taxes 
D) a rise in the foreign exchange value of the dollar

Quizplus · Accepted Answer

A decrease in taxes increases consumers' disposable income, leading to higher spending and thus an increase in aggregate demand.

-Which of the Following Would Cause an Increase in Aggregate