A change in ________ creates a movement along the aggregate demand curve, while a change in ________ shifts the aggregate demand curve.
A) expected profits; tax rates
B) the price level; government expenditures
C) foreign income; the foreign exchange rate
D) real wealth; human capital

Question

Quizplus · Accepted Answer

A change in the price level results in a movement along the aggregate demand curve because it affects the quantity of goods and services demanded at different price levels. A change in government expenditures is one of the factors that can shift the aggregate demand curve, as it directly affects the total demand in the economy by increasing or decreasing public spending.

A Change in ________ Creates a Movement Along the Aggregate