Question
In: Economics
Which of the following shifts aggregate demand to the left? a. an increase in the price...
Which of the following shifts aggregate demand to the left?
a. an increase in the price level.
b. an increase in net exports.
c. Congress passes a new investment tax credit.
d. households decide to save a larger fraction of their income.
Solutions
Expert Solution
Leftward shift of the aggregate demand curve implies a decrease in aggregate demand.
There are four components of aggregate demand - Consumption spending, Investment spending, Government spending, and Net exports.
Decrease in any one or more than one of these will lead to decrease in aggregate demand.
If households decide to save a larger fraction of their income then this implies that they will be reducing their consumption expenditure. This will reduce the aggregate consumption expenditure in the economy.
This in result will lead to decrease in aggregate demand and will shifts the aggregate demand to the left.
Hence, the correct answer is the option (d).
Rahul Sunny answered 2 years agoRelated Solutions
Which of the following shifts aggregate demand to the left? a. The price level rises. b....
Which of the following shifts aggregate demand to the
left?
a. The price level rises.
b. Interest rates fall.
c. The dollar depreciates for some reason other than a change in
the price level.
d. Stock prices fall for some reason other than a change in the
price level.
Aggregate demand shifts left when the government
Aggregate demand shifts left when the governmentSelect one: a. decreases taxes. b. cuts military expenditures c. creates a new investment tax credit d. None of the above is correct.
An increase in investment creates a ______ ______ in aggregate demand, the aggregate demand curve shifts...
An increase in investment creates a ______ ______ in aggregate
demand, the aggregate demand curve shifts ________ potentially
brining ________ phase of the business cycle.
larger; increase; rightward; expansion
larger; decreases; leftward; recession
smaller; increases; rightward; expansion
smaller; decreases; leftward; recession
An increase in government spending shifts aggregate demand
An increase in government spending shifts aggregate demand a. to the right. The larger the multiplier is, the less it shifts b. to the left. The larger the multiplier is, the farther it shifts. c. to the left. The larger the multiplier is, the less it shifts. d. to the right. The larger the multiplier is, the farther it shifts.
Which of the following shifts aggregate demand to the right? a. a decrease in the money...
Which of the following shifts aggregate demand to the right?
a.
a decrease in the money supply
b.
a decrease in net exports at every exchange rate
c.
a decrease in prices
d.
a decrease in taxes
increases in taxes shifts aggregate demand to the left. In the short run this makes output...
increases in taxes shifts aggregate demand to the left. In the
short run this makes output fall which makes the interest rates
rise. Is it that correct？Why？
increases in taxes shifts aggregate demand to the left. In the short run this makes output...
increases in taxes shifts aggregate demand to the left. In the
short run this makes output fall which makes the interest rates
rise. Is it that correct？Why？
QUESTION 1 When the demand curve for coffee shifts to the left, which of the following...
QUESTION 1
When the demand curve for coffee shifts to the left, which of
the following outcomes is NOT expected to occur?
A.
Quantity supplied declines
B.
Equilibrium price declines
C.
Equilibrium price increases
D.
Quantity demanded declines
2 points
QUESTION 2
If the equilibrium price for milk in the retail grocery market
increases, then we know that:
A.
the retail milk demand curve shifts rightward
B.
the retail milk demand curve shifts leftward
C.
we move downwards along...
Which one of these is NOT correct regarding shifts in the aggregate demand curve?
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.
the aggregate demand curve shifts in when?
the
aggregate demand curve shifts in when?
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