Which of the Following Would Cause the AD Curve to Shift

question 29

Multiple Choice

Which of the following would cause the AD curve to shift to the right?

• A)An increase in the real rate of interest
• B)A decrease in government purchases
• C)An increase in government purchases
• D)An increase in the rate of inflation
• E)A decrease in the rate of inflation

---

Definitions:

Contagion

A pattern in which stock markets have become increasingly interconnected around the world and markets in different countries have begun reacting similarly.

Net Present Value

A financial metric that calculates the present value of net cash flows (inflows minus outflows) over a period, used for assessing the profitability of an investment.

Mutual Funds

Shareholder-financed investment schemes that are professionally overseen and involve trading in a variety of holdings.

Weighted Average Cost

A calculation that takes into account the varying costs of different components of a product or service, weighted by their respective proportions.