A lower price level causes the C + I + G + X curve to shift as a result of a change in all the following EXCEPT
A) an increase in real wealth.
B) a decrease in interest rates.
C) an increase in aggregate supply.
D) an increase in foreign spending on domestic goods.

Question

Quizplus · Accepted Answer

An increase in aggregate supply would cause the price level to decrease and increase the quantity of goods and services supplied, but it would not directly affect the C + I + G + X curve. Instead, it would shift the aggregate supply curve. The other three options would directly affect the C + I + G + X curve, as they would increase the demand for goods and services and shift the curve to the right.

A Lower Price Level Causes the C + I