Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A decrease in consumer confidence leading to reduced spending
B
An increase in wages causing the short-run aggregate supply curve to shift left
C
A technological advancement improving production efficiency
D
A rise in the price of oil increasing production costs
Understanding the Answer
Let's break down why this is correct
Answer
A shift in the aggregate demand curve happens when there is a change in the total demand for goods and services in an economy at every price level. For example, imagine a country that suddenly invests a lot of money in new infrastructure projects, like roads and bridges. This investment leads to more jobs and higher incomes for workers, which means people have more money to spend. As a result, consumers buy more products, increasing overall demand, which shifts the aggregate demand curve to the right. This shift shows that at every price level, people are willing to buy more because of the positive change in the economy.
Detailed Explanation
When people feel less confident about the economy, they spend less money. Other options are incorrect because This option confuses supply with demand; This scenario is about improving how things are made, which changes supply.
Key Concepts
Aggregate Demand
Economic Graph Interpretation
Equilibrium Analysis
Topic
Aggregate Demand and Supply Analysis
Difficulty
easy level question
Cognitive Level
understand
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