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Economics question

Holding all other factors constant, what could cause aggregate demand to increase?

A.
There is a sudden drop in demand for domestic goods by foreigners
B.
Workers productivity rates increase
C.
Firms decide to decrease their investment spending
D.
Households decide to spend more of their disposable incomes
E.
The government decides to increase income tax rates
D - this causes consumer spending to increase. Consumer spending/consumption is a part of AD
Reply 2
Avatar for bbvii
bbvii
7
A would reduce demand.
B would increase supply.
C would reduce supply.
D would increase demand.
E would reduce demand.
Reply 3
Avatar for c.a.p
c.a.p
OP
4
Thankyou both for the reply! @bbvii thankyou for the detailed answer, its given me more of an understanding on the Aggregate Demand topic!

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