Which of the following will shift the aggregate demand (ADI)curve to the right?
A) Income taxes are raised.
B) The government increases spending on education.
C) Consumers become pessimistic about the future.
D) Business managers become pessimistic about the future.
E) Foreign economies fall into recession,reducing their demand for domestic exports.

Question

Quizplus · Accepted Answer

Government increasing spending on education will increase the disposable income of individuals, which will increase consumption and shift the ADI curve to the right. The rest of the options will either decrease consumption or investment, and thus shift the ADI curve to the left.

Which of the Following Will Shift the Aggregate Demand (ADI)curve