Which of the following does not change aggregate demand?
A)an increase in expected future income
B)a change in fiscal policy
C)a change in monetary policy
D)an advance in technology
E)a rise in the exchange rate

Question

Quizplus · Accepted Answer

An advance in technology does not directly change aggregate demand, as it does not affect any of the components that aggregate demand is composed of (consumption, investment, government spending, and net exports). It may indirectly affect aggregate demand over the long term by increasing productivity and potential output, but this is not an immediate or direct effect. In contrast, options A, B, C, and E all have direct effects on the components of aggregate demand, and therefore change aggregate demand in the short term.

Which of the Following Does Not Change Aggregate Demand