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Figure: Predicting Aggregate Demand Shifts
-(Figure: Predicting Aggregate Demand Shifts) Which of the following would shift the aggregate demand curve from AD₁ to AD₂?

Question

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Figure: Predicting Aggregate Demand Shifts

-(Figure: Predicting Aggregate Demand Shifts) Which of the following would shift the aggregate demand curve from AD₁ to AD₂?

Quizplus · Accepted Answer

A decrease in interest rates typically lowers the cost of borrowing, encouraging spending and investment, which shifts the aggregate demand curve to the right from AD1 to AD2.

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