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) 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 AD curve is typically caused by changes in the inflation rate affecting interest rates, which in turn influence investment levels.

Which of the Following Best Describes Movement Along the AD