Which one of the following shifts the aggregate demand curve leftward?
A)a decrease in the interest rate
B)an increase in expected inflation
C)an increase in taxes
D)an increase in the price level
E)an increase in the money wage rate

Question

Quizplus · Accepted Answer

An increase in taxes reduces disposable income, which leads to a decrease in consumer spending and investment. This, in turn, leads to a leftward shift in the aggregate demand curve.

Which One of the Following Shifts the Aggregate Demand Curve