Suppose consumers decrease their consumption expenditure because they worry about what their income will be in the future. There is
A) an upward movement along the aggregate demand curve.
B) a rightward shift of the aggregate demand curve.
C) a downward movement along the aggregate demand curve.
D) a leftward shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

A decrease in consumption expenditure implies a decrease in overall spending which leads to a decrease in aggregate demand. This decrease in aggregate demand is best represented by a leftward shift of the aggregate demand curve.

Suppose Consumers Decrease Their Consumption Expenditure Because They Worry About