Which of the following policy actions shifts the aggregate-demand curve?
A)an increase in the money supply
B)an increase in taxes
C)an increase in government spending
D)All of the above are correct.

Question

Quizplus · Accepted Answer

An increase in the money supply, an increase in government spending, and a decrease in taxes can all shift the aggregate-demand curve. When there is an increase in the money supply or government spending, consumers and firms have more money to spend, which leads to an increase in demand for goods and services. When taxes are lowered, consumers and firms have more disposable income, leading to an increase in demand as well. All three actions can stimulate economic growth and increase aggregate demand.

Which of the Following Policy Actions Shifts the Aggregate-Demand Curve