Which of the following would shift the aggregate demand curve leftward year after year?
A) a one-time tax cut
B) a one-time increase in government expenditures on goods and services
C) inflation
D) negative growth in the quantity of money

Question

Quizplus · Accepted Answer

A one-time tax cut or a one-time increase in government expenditures would temporarily increase aggregate demand but would not cause a year-after-year leftward shift. Inflation itself is more of a consequence of shifts in aggregate demand and supply rather than a cause. Negative growth in the quantity of money, however, would decrease the overall spending in the economy, leading to a leftward shift in the aggregate demand curve year after year as the economy adjusts to a lower money supply.

Which of the Following Would Shift the Aggregate Demand Curve