Which of the following shifts aggregate demand to the left?
A) a decrease in exports
B) a decrease in taxes
C) a decrease in imports
D) a decrease in interest rates

Question

Quizplus · Accepted Answer

A decrease in exports means that there will be less foreign demand for domestic goods and services, which decreases overall demand in the economy and shifts aggregate demand to the left. The other three options would all shift aggregate demand to the right: a decrease in taxes increases disposable income, leading to more consumption spending; a decrease in imports means more domestic demand for domestically produced goods and services; and a decrease in interest rates encourages borrowing and investment, increasing both consumption and investment spending.

Which of the Following Shifts Aggregate Demand to the Left