(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

---

Definitions:

Foreign Exchange Rate

The price of one country's currency in terms of another's, determining how much foreign currency can be exchanged for a unit of domestic currency.

German Marks

The official currency of Germany before the adoption of the euro, used from 1873 to 2002.

Dollar Price

This refers to the cost or value of a good, service, or asset expressed in terms of the United States dollar.

English Pound

The currency of the United Kingdom, which is one of the world's major currencies used for trade and investment.