The AD curve shifts to the right when
A) the Fed alters its fiscal policy rules
B) any economic shock disrupts the economy
C) the AS curve does not shift
D) new trade legislation is passed
E) positive demand shocks occur

Question

Quizplus · Accepted Answer

The AD curve shifts to the right when there is a positive demand shock, such as an increase in consumer confidence, a rise in government spending, or a decrease in interest rates. This leads to an increase in aggregate demand, which shifts the AD curve to the right. The other options do not necessarily cause a shift in the AD curve.

The AD Curve Shifts to the Right When