Answer to Question #80792 in Macroeconomics for AYANDA

Question

Which of the following will shift the aggregate demand curve to the left?

1) An increase in the general price level.
2) An increase in productivity.
3) An increase in the net exports.
4) A reduction in government spending.

Answer 1

4) A reduction in government spending.
Aggregate demand changes in response to a change in any of its components. Reduction in government spending decreases aggregate demand.