Question

The solution to simultaneous deflation and unemployment is to shift the:

a. aggregate demand curve to the left.
b. short-run aggregate supply curve to the right.
c. short-run aggregate supply curve to the left.
d. aggregate demand curve to the right.

Answer 1

d. aggregate demand curve to the right.

Step-by-step explanation:

Keynesian macroeconomics Solution to recession Extended fiscal policy, such as tax cuts to promote consumption and investment, or direct increases in government spending, shifts the aggregate demand curve to the right.

so correct option is d. aggregate demand curve to the right.