Give examples of factors that decrease aggregate demand. Which way does the aggregate demand curve shift?
What will be an ideal response?
Anything that decreases aggregate spending decreases aggregate demand. A rise in the interest rate, a decrease in the quantity of money, a decrease in government expenditure, a tax hike, a rise in the exchange rate, and a decrease in real GDP in the rest of the world all decrease aggregate demand. The aggregate demand curve shifts leftward.
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If an isocost line crosses the isoquant twice, a cost minimizing firm will
A) use a different isocost line to select the bundle of inputs. B) use the input bundle associated with the intersection on the higher point of the isoquant. C) use the input bundle associated with the intersection on the lower point of the isoquant. D) Both B and C.
Sellers will opt out of markets in which:
A. there are significant negative externalities. B. standardized products exist. C. there are only foreign buyers. D. information about buyers is inadequate, and some buyers can impose high costs on the sellers.