Which of the following decreases aggregate demand and shifts the AD curve leftward?
A) A tax cut
B) An increase in government expenditures on goods and services
C) A decrease in potential GDP
D) The Reserve Bank increasing the interest rate
E) An increase in the quantity of money

Question

Quizplus · Accepted Answer

An increase in the interest rate by the Reserve Bank makes borrowing more expensive, reducing consumer and business spending, which decreases aggregate demand and shifts the AD curve leftward.

Which of the Following Decreases Aggregate Demand and Shifts the AD