Which of the following government actions will shift the aggregate demand right?
A)a rise in personal income taxes
B)an increase in the money supply
C)a repeal of an investment tax credit
D)closing up a military facility to reduce costs

Question

Quizplus · Accepted Answer

An increase in the money supply will make more money available to consumers and businesses, encouraging spending and investment, thus shifting the aggregate demand right. The other choices either decrease disposable income (A) or decrease government spending (D), both of which would shift aggregate demand leftward. Repealing an investment tax credit (C) would increase the cost of investment, also reducing aggregate demand.

Which of the Following Government Actions Will Shift the Aggregate