Changes in which of the two factors below would most likely cause a change in consumer spending? The following list of factors, are related to the aggregate demand curve.Real-balances effect
Household expectations
Interest-rate effect
Personal income tax rates
Profit expectations
National income abroad
Government spending
Foreign trade effect
Exchange rates
Degree of excess capacity
A)1 and 3
B)2 and 4
C)5 and 10
D)8 and 9

Question

Quizplus · Accepted Answer

Consumer spending is most directly affected by household expectations and personal income tax rates. Therefore, changes in factors 2 and 4 (household expectations and personal income tax rates) would most likely cause a change in consumer spending.

Changes in Which of the Two Factors Below Would Most