(Figure: Predicting Aggregate Demand Shifts) Which of These Would Shift

question 281

Multiple Choice

(Figure: Predicting Aggregate Demand Shifts) Which of these would shift the aggregate demand curve from AD₁ to AD₂?

• A) an increase in taxes
• B) a decrease in interest rates
• C) a decrease in government purchases
• D) a worsening of consumer expectations about the future

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Definitions:

Expense

A cost or charge that a company incurs through its operations aimed at generating revenue.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Total Assets

The sum of all resources owned by a company, valued in monetary terms, including both current and non-current assets.

Total Liabilities

The combined amount of all debts and obligations owed by a business, including loans, accounts payable, and other financial liabilities.