The recession of 2007-2009 made many consumers pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?
A)This will move the economy up along a stationary aggregate demand curve.
B)This will move the economy down along a stationary aggregate demand curve.
C)This will shift the aggregate demand curve to the left.
D)This will shift the aggregate demand curve to the right.

Question

Quizplus · Accepted Answer

Increased pessimism about future incomes will cause consumers to spend less and save more, ultimately decreasing consumption and shifting the aggregate demand curve to the left.

The Recession of 2007-2009 Made Many Consumers Pessimistic About Their