Aggregate demand increases if the quantity of money
A) decreases or tax rates increase.
B) or transfer payments decrease.
C) remains constant or tax rates increase.
D) increases or tax rates decrease.

Question

Quizplus · Accepted Answer

Aggregate demand increases when the quantity of money in the economy increases, as this typically leads to more spending. Similarly, when tax rates decrease, consumers and businesses have more disposable income to spend, which also increases aggregate demand.

Aggregate Demand Increases If the Quantity of Money