A decrease in interest rates will cause
A)AD to increase (move to the right).
B)AD to decrease (move to the left).
C)AS to increase (move to down and to the right).
D)AS to decrease (move to up and to the left).

Question

Quizplus · Accepted Answer

A decrease in interest rates will lead to an increase in investment and consumption spending, which will both contribute to an increase in aggregate demand (AD). As a result, the AD curve will shift to the right.

A Decrease in Interest Rates Will Cause