Final answer:
People saving more for retirement may reduce aggregate demand by decreasing present consumption, while an increase in the money supply by the Fed encourages spending, potentially increasing aggregate demand. Without knowing the magnitudes of each effect, it's not certain which will predominate.
Step-by-step explanation:
In which case can we be sure aggregate demand shifts left overall? The answer depends on combining a couple of economic principles. If people want to save more for retirement, they are likely to consume less in the present, thus reducing current consumption, which is a component of aggregate demand. Consequently, increased savings could shift the aggregate demand curve to the left.
However, when the Federal Reserve increases the money supply, this generally leads to lower interest rates and encourages borrowing and spending, which would shift aggregate demand to the right. So, we have two contrasting effects.
Which effect overrides the other depends on the magnitudes of the shifts in savings behavior and the changes in the money supply. If the desire to save dramatically outweighs the propensity to spend from the increased money supply, then we could expect the aggregate demand to shift to the left. Yet, without specified magnitudes, it's hard to be certain that aggregate demand will shift left overall as both factors play a role in determining which way it will go.