Question

Which of the following actions would cause the aggregate demand curve to shift to the​ left? A. an increase in government spending caused by increased spending on highways and bridge construction B. a decrease net export spending caused by an appreciation of the home currency C. an increase in exports caused by an increase in economic activity in the European Union D. an increase in consumer spending caused by a cut in the personal income tax rate

Answer 1

B. a decrease net export spending caused by an appreciation of the home currency

Step-by-step explanation:

When the aggregate demand curve shifts to the left, it means that total consumer spending decreases. This decrease might result from consumers having less money due to a rise in unemployment, high inflation, a decrease in economic activity or an increase in taxes. This type of shift is specially "dangerous" for the economy because consumer spending represents almost 70% of the GDP.

In this case, the appreciation of the US dollar resulted in a decrease in economic activity of exporting companies.