Question

Which BEST summarizes and explains the most likely change in short-run aggregate demand based on the information above?

A) The tariff will have no impact on aggregate demand in the short-run.
B) The tariff will cause imports to increase , therefore shifting the aggregate demand curve to the left.
C) The tariff will cause imports to increase while increasing demand for domestic goods and resources, therefore shifting the aggregate demand curve to the left.
D) The tariff will cause imports to decrease while increasing demand for domestic goods and resources, therefore shifting the aggregate demand curve to the right.

Answer 1

D.

Step-by-step explanation:

Answer 2

D) Tariff cause the imports to decrease while increasing of demand for domestic resources and goods, therefore shifting aggregate curve of demand to right.

Step-by-step explanation:

Aggregate supply is described as the real GDP firms make. That is; it is the total goods and services company produce which in turn contribute to the overall GDP. The aggregate demand has four numbers of components which are dependent on each other.

These include consumption spending, government spending, investment spending, and spending on export goods. Any change in components results in shifting of the graph. The graph shift to right if there is an increase in all components and less imports resulting in the equilibrium output.