Which of the following causes a movement along the aggregate demand curve?
A) a fall in wages
B) an increase in prices
C) an increase in government spending
D) a decrease in taxes

Question

Quizplus · Accepted Answer

An increase in prices causes a movement along the aggregate demand curve, as it leads to a decrease in real wealth and therefore a decrease in consumer spending, leading to a decrease in overall demand. A fall in wages or an increase in government spending or a decrease in taxes would shift the aggregate demand curve, as they would affect overall demand in the economy.

Which of the Following Causes a Movement Along the Aggregate