Which of the following will increase aggregate demand?
A) Expansionary fiscal policy.
B) A decrease in the growth of the money supply.
C) A policy of laissez faire.
D) Supply-side options,such as deregulation.

Question

Quizplus · Accepted Answer

Expansionary fiscal policy, such as increasing government spending or decreasing taxes, will increase aggregate demand by increasing consumer spending and investment.

Answer: D
 Supply-side options, such as deregulation and tax cuts for businesses, can also increase aggregate demand by promoting economic growth and increasing production, which in turn leads to increased employment and consumer spending.

Which of the Following Will Increase Aggregate Demand