Within the AD/AS model, if consumers and investors become more optimistic about the future direction of the economy,
A) aggregate demand will decrease.
B) aggregate demand will increase.
C) long-run aggregate supply will increase.
D) long-run aggregate supply will decrease.

Question

Quizplus · Accepted Answer

If consumers and investors become more optimistic about the future direction of the economy, they are more likely to spend and invest, causing an increase in aggregate demand. This shift in sentiment can lead to increased economic growth and expansion.

Within the AD/AS Model, If Consumers and Investors Become More