An example of a positive demand shock is
A) a decrease in the money supply.
B) a decrease in government spending.
C) a decrease in foreign export demand.
D) a decrease in the price of imported oil.
E) a decrease in tax rates.

Question

Quizplus · Accepted Answer

A decrease in tax rates can increase consumers' disposable income, leading to higher consumption and thus increasing overall demand in the economy, which is a positive demand shock.

An Example of a Positive Demand Shock Is