If aggregate demand just increased, which of the following may have caused the increase?
A)an increase in government purchases
B)an increase in the interest rate
C)an increase in the price level
D)an increase in imports
E)an increase in taxes

Question

Quizplus · Accepted Answer

An increase in government purchases would increase aggregate demand, as it represents an increase in spending by the government that can stimulate the economy. Increases in the interest rate, price level, imports, and taxes would generally have a contractionary effect on aggregate demand.

If Aggregate Demand Just Increased, Which of the Following May