Which of the following can shift the aggregate demand curve?

The aggregate demand curve represents the total demand for goods and services in an economy at various price levels, and several factors can shift this curve. One of the key determinants is changes in interest rates and fiscal policy. When interest rates are adjusted, either through monetary policy or fiscal actions, it directly affects consumer spending and business investment. For example, a decrease in interest rates lowers the cost of borrowing, encouraging both consumers to take out loans for purchases and businesses to invest in expansion. This increased spending by households and firms raises aggregate demand, shifting the curve to the right. Conversely, an increase in interest rates can have the opposite effect, reducing spending and shifting the curve to the left.

Fiscal policy, which involves government spending and taxation, also plays a crucial role in shifting the aggregate demand curve. An increase in government spending injects more money into the economy, stimulating demand for goods and services. Tax cuts can increase disposable income for households and businesses, further enhancing consumption and investment levels.

In contrast, the other factors mentioned—industrial output and technological advances, labor force size and productivity levels, and changes in natural resources—primarily influence the aggregate supply curve. Industrial output and technological improvements can enhance production capabilities, impacting supply. Similarly, changes in labor force