If some non-price level determinant causes total spending to decrease, there will be a(n):
A)upward movement along the aggregate demand curve.
B)downward movement along the aggregate demand curve.
C)leftward shift of the aggregate demand curve.
D)rightward shift of the aggregate demand curve.
E)increase in the slope of the aggregate demand curve.

Question

Quizplus · Accepted Answer

A decrease in total spending caused by a non-price level determinant, such as a decrease in consumer confidence or a decrease in government spending, would result in a leftward shift of the aggregate demand curve. This is because the same price level would now result in a lower quantity of goods and services demanded, as overall spending in the economy has decreased.

If Some Non-Price Level Determinant Causes Total Spending to Decrease