Which of the following shifts aggregate demand to the right?
A)The price level rises.
B)The price level falls.
C)The Fed purchases government bonds on the open market.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

When the Fed purchases government bonds on the open market, it increases the money supply and lowers interest rates, which stimulates investment and consumption spending, leading to an increase in aggregate demand. The other options, A and B, lead to movements along the aggregate demand curve, not shifts.

Which of the Following Shifts Aggregate Demand to the Right