Which one of the following factors will not shift the aggregate demand curve?
A)an increase in the interest rate
B)an increase in the price level
C)an increase in the expected inflation rate
D)an increase in expected future profits
E)an increase in the quantity of money

Question

Quizplus · Accepted Answer

Changes in the price level do not shift the aggregate demand curve, but rather result in movement along the aggregate demand curve. All of the other factors listed can shift the curve. An increase in the interest rate will reduce consumption and investment spending, shifting the curve to the left. An increase in expected inflation or future profits will increase consumption and investment spending, shifting the curve to the right. An increase in the quantity of money will lower interest rates, increasing consumption and investment spending, and shifting the curve to the right.

Which One of the Following Factors Will Not Shift the Aggregate