Which of the following shifts aggregate demand to the left

Posted By Admin @ September 06, 2022

Question:

7. Which of the following both shift aggregate demand left? a. a decrease in taxes and at a given price level consumers feel more wealthy b. a decrease in taxes and at a given price level consumers feel less wealthy c. an increase in taxes and at a given price level consumers feel more wealthy d. an increase in taxes and at a given price level consumers feel less wealthy

Answer:

The situation that will lead both the shift in aggregate demand would be:

d). An increase in taxes and at a given price level consumers feel less wealthy.

  • The situation that will cause both ways to shift in the aggregate demand would be the hike in tax rates and the reduction in purchasing power of the people.
  • Both the situations will cause a reduction in the quantity demanded and Q2 would shift to Q1.
  • Therefore, the aggregate demand would shift to the left due to this decrease in demand.

Thus, option d is the correct answer.

Learn more about 'Demand Curve' here:

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