Which of the following scenarios would cause aggregate demand to rise?

Multiple choice question for Supply and Demand. Select an option, then review the explanation below.

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A decrease in consumer spendingA reduction in business investmentA decline in export levelsA drop in the volume of importsAn increase in government taxes

Explanation

Aggregate demand increases when imports decrease because lower imports mean more domestic goods are purchased, boosting overall demand within the economy. Conversely, decreases in consumption, investment, or exports would reduce aggregate demand.

Practice related questions from the same subject.

1.What is the typical shape of a demand curve?
2.What term describes a company earning profits beyond its normal profit level?
3.How does an increase in marginal cost affect output, and how does an increase in marginal revenue impact output?
4.Marginal revenue refers to the ________ resulting from producing an additional ________ of output.
5.What are firms generally assumed to do with their costs and profits?

Which of the following scenarios would cause aggregate demand to rise?

Explanation

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