Individuals' expectations of higher future income is a
A) rightward shifter of the AD curve.
B) leftward shifter of the AD curve.
C) reason for moving up along a given AD curve.
D) reason for moving down along a given AD curve.

Question

Quizplus · Accepted Answer

Expectations of higher future income increase consumers' confidence, leading to more current spending. This increase in spending shifts the Aggregate Demand (AD) curve to the right, as it indicates a higher overall demand for goods and services at every price level.

Individuals' Expectations of Higher Future Income Is a