QuestionJune 3, 2025

What might shift aggregate demand? Changes in the business taxes loss of business confidence C A shortage of production inputs technological innovation

What might shift aggregate demand? Changes in the business taxes loss of business confidence C A shortage of production inputs technological innovation
What might shift aggregate demand?
Changes in the business taxes
loss of business confidence
C A shortage of production inputs
technological innovation

Solution
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Answer

Changes in business taxes, loss of business confidence, and technological innovation can shift aggregate demand. Explanation 1. Identify Factors Affecting Aggregate Demand Aggregate demand can shift due to changes in consumption, investment, government spending, and net exports. 2. Analyze Each Factor - **Changes in Business Taxes**: A decrease in business taxes increases investment, shifting aggregate demand right. - **Loss of Business Confidence**: Reduces investment, shifting aggregate demand left. - **Shortage of Production Inputs**: Typically affects aggregate supply, not demand. - **Technological Innovation**: Can increase productivity and investment, shifting aggregate demand right.

Explanation

1. Identify Factors Affecting Aggregate Demand<br /> Aggregate demand can shift due to changes in consumption, investment, government spending, and net exports.<br /><br />2. Analyze Each Factor<br /> - **Changes in Business Taxes**: A decrease in business taxes increases investment, shifting aggregate demand right.<br /> - **Loss of Business Confidence**: Reduces investment, shifting aggregate demand left.<br /> - **Shortage of Production Inputs**: Typically affects aggregate supply, not demand.<br /> - **Technological Innovation**: Can increase productivity and investment, shifting aggregate demand right.
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