Which of the Following Decreases Aggregate Demand and Shifts the AD

question 7

Multiple Choice

Which of the following decreases aggregate demand and shifts the AD curve leftward?

• A) A tax cut
• B) An increase in government expenditures on goods and services
• C) A decrease in potential GDP
• D) The Reserve Bank increasing the interest rate
• E) An increase in the quantity of money

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Definitions:

Note Payable

A formal written agreement to repay a borrowed amount of money, including terms such as interest rate and maturity date.

Accounts Payable

The amounts owed by a business to its suppliers or creditors for goods and services received but not yet paid for.

Promissory Note Receivable

This is a financial asset representing a written promise by one party to pay a specified sum of money to another party under agreed terms.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan remaining.