Which of the following would lead to an increase in aggregate demand?
A)an increase in consumer confidence
B)a decrease in the overall price level
C)an increase in input prices
D)all of the above

Question

Which of the following would lead to an increase in aggregate demand?
A)​an increase in consumer confidence
B)​a decrease in the overall price level
C)​an increase in input prices
D)​all of the above

Quizplus · Accepted Answer

An increase in consumer confidence will lead to higher consumption spending, which is a component of aggregate demand.

Answer: B
 A decrease in overall price level will increase the purchasing power of consumers, leading to higher consumption spending, which is a component of aggregate demand.

Answer: C
 An increase in input prices will lead to higher production costs, causing firms to charge higher prices for their goods and services, potentially leading to inflation. This will ultimately decrease consumption spending and aggregate demand.

Therefore, the correct answer is A and B.

Which of the Following Would Lead to an Increase in Aggregate