Decrease in Aggregate Demand

Steps:

• Identify the change as a leftward shift in the aggregate demand (AD) curve, indicating reduced total spending.
• Recall that net exports (exports minus imports) are a component of AD in the formula AD = C + I + G + (X - M).
• Determine which option reduces net exports or AD directly.
• Eliminate options that increase AD or affect supply side.

Why A is correct:

• A decrease in exports reduces net exports (X - M), shifting AD leftward per the AD formula.

Why the others are wrong:

• B: An increase in government spending raises G, shifting AD rightward.
• C: An increase in the money supply lowers interest rates, boosting investment and consumption, shifting AD rightward.
• D: A decrease in labor productivity shifts the aggregate supply curve leftward, not AD.

Not enough information to confirm the exact change depicted.

Final answer: A