A movement along the aggregate demand curve but not a shift in the aggregate demand curve is created by a
A) change in the price level.
B) change in fiscal policy.
C) change in tax rates.
D) None of the above because they all shift the aggregate demand curve.

Question

Quizplus · Accepted Answer

A movement along the aggregate demand curve is created by a change in the price level. This is known as a change in quantity demanded and does not shift the entire aggregate demand curve. Changes in fiscal policy and tax rates, on the other hand, would shift the aggregate demand curve as they affect overall spending in the economy.

A Movement Along the Aggregate Demand Curve but Not a Shift