Explain whether each of the changes causes aggregate

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Question: Explain whether each of the following changes causes Aggregate Demand to increase, decrease, or neither. For each event, state whether the AD curve would shift in to the right, out to the left, or not shift at all. Explain why.

a. the average price level increases

b. businesses become less confident about the future and cut back on their investment spending

c. the average price level decreases

d. consumers decide to spend larger portions of their incomes

e. government spending increases as part of President Trump's plan to repair the country's aging infrastructure (bridges and roads, in particular)

Reference no: EM133582941

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