Which of the following causes a shift of the AD curve to the right?
A) an increase in income taxes
B) an increase in consumer confidence
C) an increase in import growth
D) an increase in interest rates

Question

Quizplus · Accepted Answer

An increase in consumer confidence would lead to increased consumer spending, which would shift the AD curve to the right, as there would be an increase in aggregate demand. An increase in income taxes would lead to a decrease in disposable income, leading to a decrease in consumer spending, which would shift the AD curve to the left. An increase in import growth would mean that more spending is going to foreign goods, which would lead to a decrease in net exports and a decrease in aggregate demand, shifting the AD curve to the left. An increase in interest rates would lead to a decrease in consumer spending and investment, which would shift the AD curve to the left.

Which of the Following Causes a Shift of the AD