Which of the following best describes movement along the AD curve?
A) A change in the inflation rate causes the central bank to change interest rates, thereby causing a corresponding proportional change in investment.
B) A sudden increase in the tax rate.
C) A change in monetary policy.
D) A change in the inflation rate causes the federal government to reduce discretionary spending.
E) A change in unemployment causes the federal government to reduce discretionary spending.

Question

Quizplus · Accepted Answer

Movement along the Aggregate Demand (AD) curve is typically caused by a change in the price level, such as the inflation rate, which affects interest rates and subsequently investment, as described in option A.

Which of the Following Best Describes Movement Along the AD