Which of the Following Actions Would Cause the Aggregate Demand

question 83

Multiple Choice

Which of the following actions would cause the aggregate demand curve to shift to the left?

• A) an increase in consumer spending caused by a cut in the personal income tax rate
• B) an increase in government spending caused by increased spending on highways and bridge construction
• C) a decrease net export spending caused by an appreciation of the home currency
• D) an increase in exports caused by an increase in economic activity in the European Union

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Definitions:

Permanent Change

An alteration in state or condition that is lasting and does not revert back to its previous state.

Pavlov

A Russian physiologist known for his discovery of classical conditioning during his experiments on the digestive systems of dogs.

Nobel Prize

An international recognition awarded annually in several categories such as Physics, Chemistry, Medicine, Literature, Peace, and Economic Sciences, for outstanding contributions in these fields.

Salivation

The secretion of saliva from the salivary glands in the mouth, which is often a response to the presence or thought of food, aiding in digestion.