Aggregate demand shifts right when the Federal Reserve a. raises personal income taxes. b. increases the money supply. c. instituted an investment tax credit. d. All of the above are correct.

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Business

Jada Kline

17 January, 08:34

Aggregate demand shifts right when the Federal Reserve a. raises personal income taxes. b. increases the money supply. c. instituted an investment tax credit. d. All of the above are correct.

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Answers (1)

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Tabitha Holloway · Answer 1

b. increases the money supply

Explanation:

When the money supply is increased by the federal reserve the aggregate demand curve will shift to the right, the reason for this is that when the money supply is increased people are more likely to consume more goods and services as there is more money available in the economy. Also one of the ways to increase the money supply is by lowering interest rates and lower interest rate encourage higher investment which will also curve the aggregate demand curve to the right.