A leftward shift in the aggregate demand curve can be caused by:
A) a decrease in the price level.
B) an increase in business investment spending.
C) a decrease in business investment spending
D) an increase in consumer optimism about the future.

Question

Quizplus · Accepted Answer

A leftward shift in the aggregate demand curve means that at any given price level, the quantity demanded for goods and services in the economy decreases. This decrease in demand can be caused by a decrease in business investment spending, meaning that businesses are investing less money in capital goods and projects, which reduces economic activity and demand for goods and services. A decrease in the price level (A) would result in a movement along the aggregate demand curve, not a shift. An increase in business investment spending (B) would actually cause a rightward shift in the aggregate demand curve. An increase in consumer optimism (D) might lead to an increase in consumption spending, but would not necessarily result in a shift in the aggregate demand curve.

A Leftward Shift in the Aggregate Demand Curve Can Be