Full question:
Which of these would not cause an increase in aggregate demand?
A) decrease in the price level
B) increase in government spending
C) decrease in the real interest rate
D) decrease in the personal income tax rate
Answer:
A. decrease in the price level
Step-by-step explanation:
Aggregate demand is the total demand for goods and services within a specific time period. (Usually, economic experts count aggregate demand annually)
When the price level of a certain product is decreased, there will be more people who will be able to afford that product without sacrificing their ability to fulfill their basic needs. As a result, This will cause an increase in aggregate demand.