Which one of these is NOT correct regarding shifts in the aggregate demand curve?

A. A surging stock market will shift the aggregate demand curve to the right.

B. A tax increase will shift the aggregate demand curve to the left.

C. Excess business capacity will shift the aggregate demand curve to the right.

D. Growing demand for our goods from other nations shifts the aggregate demand curve to the right.

Expert Solution

The shifts in the AD curve depends upon the factors which increase or decrease the aggregate expenditure which in turn depends upon the change in consumption, investment, government spending, and net exports

The following statements is not correct:

Excess business capacity will shift the AD curve to the right

option(C)

Rahul Sunny answered 2 years ago

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