The aggregate demand curve shifts rightward if there is
A) an increase in tax rates.
B) a decrease in government expenditure.
C) an increase in the federal budget surplus.
D) an increase in government expenditure.

Question

Quizplus · Accepted Answer

An increase in government expenditure directly increases aggregate demand, as the government is injecting more money into the economy, encouraging more spending and investment.

The Aggregate Demand Curve Shifts Rightward If There Is