The Aggregate Demand Curve Would Shift to the Right as a Result

question 265

Multiple Choice

The aggregate demand curve would shift to the right as a result of

• A) a drop in the price level.
• B) tax increases.
• C) an increase in the U.S. real interest rate.
• D) a decrease in the amount of money in circulation.

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Definitions:

Savings Exceeds Investment

A situation in which the amount saved by households or organisations is greater than the amount being invested within the economy.

Recession

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in GDP, real income, employment, industrial production, and wholesale-retail sales.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, over a specific period.

Subnormal Activity

Activities or economic conditions below the standard or average level, often indicative of a slowdown or recession.