Aggregate demand shifts right if
A)government purchases increase and shifts left if stock prices rise.
B)government purchases increase and shifts left if stock prices fall.
C)government purchases decrease and shifts left if stock prices rise.
D)government purchases decrease and shifts left is stock prices fall.

Question

Quizplus · Accepted Answer

Aggregate demand shifts right when government purchases increase because it directly increases overall spending in the economy. It shifts left when stock prices fall because this can reduce consumer wealth and spending.

Aggregate Demand Shifts Right If