The U.S. aggregate demand curve would shift to the left if A. there was a tax...
The U.S. aggregate demand curve would shift to the left if
A.
there was a tax decrease.
B.
the economic conditions in Europe improved.
C.
the Federal Reserve Board caused the real interest rate to increase.
D.
the foreign exchange rate of the dollar decreased.
Homework Answers
Answer
Option C
the Federal Reserve Board caused the real interest rate to increase.
The decrease in tax increases disposable income and increases consumption and investment spending in the economy which increases aggregate demand which shifts AD to the right.
A European condition improved will increase export and shifts AD to the right.
The foreign exchange rate of the dollar decreased means the export increases and AD shifts to the right.
The increase in interest rate decreases consumption and investment spending in the economy and shifts the AD curve to left.
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The U.S. aggregate demand curve would shift to the left if
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