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4 July, 11:06

State and Local Governments and Aggregate Demand. The aggregate demand curve shifts to the left if?

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  1. 4 July, 12:19
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    The aggregate demand curve shifts to the left if the total quantity of goods and services demanded by consumers declines at a particular price. Such decline could be brought about by an anticipation to price increase of goods and services in the future. The economy is then said to be "contracting."

    Explanation:

    The "aggregate demand" refers to the "domestic final demand." The "aggregate demand curve" shows the demand of the consumers when the prices of goods are set at varying levels.

    Another reason for an aggregate demand to shift to the left is the increase of taxes imposed by the government. This allows the people to save more money rather than spend.

    So, this explains the answer.
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