A change in aggregate demand causes a change in income, which in turn induces a
Jchange in consumption.

Question

Quizplus · Accepted Answer

A change in aggregate demand can lead to a change in income, which can affect consumption through the income effect. When income increases, consumers have more disposable income, allowing them to consume more, and vice versa. Therefore, a change in aggregate demand can lead to a change in consumption.

A Change in Aggregate Demand Causes a Change in Income