Which of the following will shift the aggregate demand curve to the left, ceteris paribus?
A)an increase in interest rates
B)an increase in disposable income
C)an increase in expected profits for firms
D)an increase in net exports
E)an increase in the price level

Question

Quizplus · Accepted Answer

An increase in interest rates will decrease investment by businesses and decrease consumer spending on interest-sensitive items such as homes and cars, thus decreasing aggregate demand.

Which of the Following Will Shift the Aggregate Demand Curve