Increased levels of spending on imports ?
Correct answer: D. shift aggregate demand to the left
- A. shift aggregate supply to the right
- B. shift aggregate supply to the left
- C. shift aggregate demand to the right
- D. shift aggregate demand to the left
Explanation
Imports are a leakage from aggregate expenditure, so higher import spending reduces net exports and shifts aggregate demand to the left. Aggregate supply is not directly shifted by this change in spending.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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