Question

Identify three factors that can shift the aggregate demand curve to the right and three different factors that can shift the aggregate demand curve to the left.

Short answer

Increased government spending, increased money supply, and lower tax rates are three factors that really can shift the aggregated demand curve to the right.

Reduced government spending, a fall in the supply of money, and a rise in income rates are 3 different causes that might shift the collective demand curve to left.

Step-by-step solution

Step 1. Define aggregate demand and aggregate supply.

Aggregate demand is defined as the total amount of demand produced in the economy for all finished goods and services.

Aggregate supply, often known as total production, is the total amount of products and services in a given economy over a certain time period at a given overall price.

Step 2. Three factors which can shift the Aggregate Demand curve to the right.

Increased government expenditure causes the IS curve, and thus the AD curve, to shift to the right.

Money supply expansion: Lowering real interest rates encourages investment, which changes the IS curve. The AD curve shifts to the right as a result of the movement in the IS curve.

Reduced tax rates: As a result, individuals will have more disposable income, and consumption demand will increase for a given marginal propensity to consume.