QuestionJuly 26, 2025

Suppose a stock market boom makes people feel wealthier. The increase in wealth would cause people to desire A increased consumption, which shifts the aggregate-demand curve right. B increased consumption, which shifts the aggregate-demand curve left. C decreased consumption, which shifts the aggregate-demand curve right. D decreased consumption, which shifts the aggregate-demand curve left.

Suppose a stock market boom makes people feel wealthier. The increase in wealth would cause people to desire A increased consumption, which shifts the aggregate-demand curve right. B increased consumption, which shifts the aggregate-demand curve left. C decreased consumption, which shifts the aggregate-demand curve right. D decreased consumption, which shifts the aggregate-demand curve left.
Suppose a stock market boom makes people feel wealthier. The increase in wealth would cause people to desire
A increased consumption, which shifts the aggregate-demand curve right.
B increased consumption, which shifts the aggregate-demand curve left.
C decreased consumption, which shifts the aggregate-demand curve right.
D decreased consumption, which shifts the aggregate-demand curve left.

Solution
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Answer

A increased consumption, which shifts the aggregate-demand curve right. Explanation 1. Identify the Effect of Increased Wealth Increased wealth typically leads to increased consumption as people feel more financially secure. 2. Determine the Impact on Aggregate Demand Increased consumption shifts the aggregate-demand curve to the right, indicating higher overall demand in the economy.

Explanation

1. Identify the Effect of Increased Wealth<br /> Increased wealth typically leads to increased consumption as people feel more financially secure.<br /><br />2. Determine the Impact on Aggregate Demand<br /> Increased consumption shifts the aggregate-demand curve to the right, indicating higher overall demand in the economy.
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