Which of the following actions would cause the aggregate demand curve to shift to the left?
A) an increase in consumer spending caused by a cut in the personal income tax rate
B) an increase in government spending caused by increased spending on highways and bridge construction
C) a decrease net export spending caused by an appreciation of the home currency
D) an increase in exports caused by an increase in economic activity in the European Union

Question

Quizplus · Accepted Answer

A decrease in net export spending caused by an appreciation of the home currency would mean that exports become more expensive for foreign buyers and imports become cheaper for domestic consumers. This would lead to a decrease in exports and an increase in imports, causing a decrease in aggregate demand.

Which of the Following Actions Would Cause the Aggregate Demand