Which of the following could cause a leftward shift of the aggregate demand (AD)curve?
A)an increase in desired exports
B)an increase in government purchases
C)an increase in government transfer payments to households
D)an increase in the net tax rate
E)an increase in desired investment

Question

Quizplus · Accepted Answer

An increase in the net tax rate will decrease disposable income and reduce consumption spending, leading to a leftward shift of the AD curve. A decrease in desired exports, decrease in government purchases, decrease in government transfer payments to households, and decrease in desired investment would also shift the AD curve leftward.

Which of the Following Could Cause a Leftward Shift of the Aggregate