Aggregate demand shifts left if:   taxes rise and shifts left if stock prices rise.   taxes rise and shifts left if stock prices fall.   taxes fall and shifts left if stock prices rise.   taxes fall and shifts left is stock prices fall.

Which of the following could explain why a country’s aggregate demand curve might shift inwards to the left? a)  a decrease in interest rate. b)  an appreciation of its currency. c)  a rise in government expenditure. d)  an increase in business confidence.

If there is an increase in government expenditures and an increase in taxes by an equal amount by how much will the aggregate demand increase?

There are the three reasons why aggregate demand is downward slope: real wealth effect, interest rate effect, exchange rate effect. In a case scenario the market saw an increase in consumer spending when there is a boom in economy. Or the economic crisis makes the public bit shy to buy or consume any product. In the above two situations: the transfer payment does not make the part of government spending as the public will spend the money given as self-security and unemployment. Export situation gets worse as the foreigners are reluctant to buy expensive goods and the government will make some imports. The borrowing has become easy and loans are issued at a cheaper rate to buy car.   Following the equation: Y = C + I + G + NX will the below examples increase or decrease the aggregate demand in Pakistan? What will be the shift in position for below situations? Widespread fear of recession  The appreciation in the Pakistani Rupee rate  A boom in the stock market  An increase in transfer…