Question

36. Which event will NOT cause the aggregate demand curve to shift? Consumers' wealth declines because...

36. Which event will NOT cause the aggregate demand curve to shift?

Consumers' wealth declines because of a drop in the stock market.

The government increases spending on national security in the wake of terrorist attacks.

A rise in the aggregate price level causes a decline in exports.

Businesses are optimistic about the economy, investing heavily in new equipment.

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Answer #1

Ans.c. a rise in aggregate price level causes a decline in exports.

When there is a change in the own price of a commodity there is a movement in the demand curve (i.e. upwards or downwards) but when there is any change in the other factors of the commodity there is a shift in the demand curve ie. Rightwards or leftwards. This shows a decline or an increase in demand of the commodity as per the changes in the factors other than the own price of the commodity.

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