Which of the following would cause the AD curve to shift to the right?
A) a decrease in consumer confidence
B) a decrease in the inflation rate
C) an increase in consumer wealth
D) an increase in the short-run aggregate supply curve

Question

Quizplus · Accepted Answer

An increase in consumer wealth would lead to an increase in consumption and investment, which would increase aggregate demand (AD) and shift the AD curve to the right. Decreases in consumer confidence (A) would lead to a decrease in consumption and AD, a decrease in the inflation rate (B) would decrease prices but not necessarily increase output, and an increase in short-run aggregate supply (D) would shift the aggregate supply curve and affect the price level but not necessarily the level of output.

Which of the Following Would Cause the AD Curve to Shift