Which of the following is NOT a positive aggregate demand shock?
A) a faster money growth
B) decreased import growth
C) lower growth of government spending
D) increased wealth

Question

Quizplus · Accepted Answer

A faster money growth (choice A) increases aggregate demand because it increases the supply of money in the economy, making it easier for people to make transactions and spend more. Decreased import growth (choice B) increases aggregate demand because it means people are buying more domestic goods and services instead of importing them, which increases demand for those goods and services. Increased wealth (choice D) increases aggregate demand because as people's wealth goes up, they tend to spend more. However, lower growth of government spending (choice C) would decrease aggregate demand because it means there would be less government spending in the economy, which would reduce overall demand for goods and services.

Which of the Following Is NOT a Positive Aggregate Demand