Which of the following shifts aggregate demand to the right?
A)a decrease in the money supply
B)technological progress that increases the profitability of capital goods
C)the repeal of an investment tax credit
D)a decrease in the price level

Question

Quizplus · Accepted Answer

Technological progress that increases the profitability of capital goods would lead to an increase in investment, which would shift aggregate demand to the right.

Note: A would shift aggregate demand to the left, as a decrease in the money supply would raise interest rates, leading to a decrease in investment and consumption. C would also shift aggregate demand to the left, as the repeal of an investment tax credit would raise the cost of investment and decrease investment spending. D would shift the AD curve to the right, as a decrease in the price level would increase real wealth and spending, but this is not the strongest answer choice.

Which of the Following Shifts Aggregate Demand to the Right