The Aggregate Demand Curve Would Shift to the Left If

question 10

Multiple Choice

The aggregate demand curve would shift to the left if

• A) government spending were increased.
• B) net taxes were increased.
• C) the money supply were increased.
• D) the cost of energy were to decrease.

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Definitions:

Production Possibilities

Refers to the different combinations of goods and services an economy can produce given its resources and technology.

Capital Goods

Long-term assets used by businesses to produce goods and services, such as machinery, buildings, and equipment.

Consumer Goods

Products bought by the final consumer for personal use.

Law of Increasing Opportunity Costs

An economic principle that states as production of a good or service increases, the opportunity cost of producing another unit also increases.