Which of the Following Would Cause Aggregate Demand to Decrease

question 16

Multiple Choice

Which of the following would cause aggregate demand to decrease in a country's economy?

• A) The sense of future income decreases.
• B) Improvements are observed in the economic conditions in other countries.
• C) Tax decreases are passed.
• D) The value of the country's currency depreciates.

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Definitions:

Shortage

A market condition in which the demand for a product exceeds its supply at a particular price.

Market Price

The actual selling price of a good or service in the marketplace, determined by the forces of supply and demand.

Surplus

A situation in which the quantity of a good or service exceeds the quantity demanded at the current price.

Shortage

A situation in which the demand for a product or service exceeds the available supply.