The dynamic aggregate demand curve will shift to the right if there is a:
A) tax cut.
B) cut in government spending.
C) decrease in the money supply.
D) cut in oil prices when the cartel falls apart.

Question

Quizplus · Accepted Answer

A tax cut will increase disposable income for households and increase profits for firms, leading to higher consumption and investment spending. This will shift the aggregate demand curve to the right. The other choices will likely lead to a decrease in aggregate demand, shifting the curve to the left.

The Dynamic Aggregate Demand Curve Will Shift to the Right