What might shift the aggregate-demand curve to the left? Use the model of aggreg

Question

                    What might shift the aggregate-demand curve to the left? Use the model of aggregate demand and aggregate supply to trace through the                     short-run and long-run effects of such a shift on output and the price level. Use the following diagram to help explain your answer.

                

                                     If you can't see the diagram give me your email and I will send it, thank you.

What might shift the aggregate-demand curve to the left? Use the model of aggregate demand and aggregate supply to trace through the short-run and long-run effects of such a shift on output and the price level. Use the following diagram to help explain your answer. If you can't see the diagram give me your email and I will send it, thank you.

Explanation / Answer

Four things will shift the aggregate demand curve to the left:

1) A major decrease in the real value of CONSUMER WEALTH at each price level will reduce consumption spending and thus shift the aggregate demand curve to the left.

2) CONSUMER EXPECTATIONS of lower future income or lower future prices may reduce current consumption and shift the aggregate demand curve to the left.

3) When consumers reduce their HOUSEHOLD DEBT, both consumption spending aggregate demand decline.

4) An increase in PERSONAL INCOME TAX reduce consumption spending and shift the curve to the left.

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