A sudden increase in household wealth is an example of a ______ demand shock, which would shift the AD curve to the ______.
A) negative; left
B) positive; left
C) negative; right
D) positive; right

Question

Quizplus · Accepted Answer

A sudden increase in household wealth would increase consumer spending, which is a component of aggregate demand. This is a positive demand shock and would shift the AD curve to the right.

A Sudden Increase in Household Wealth Is an Example of a ______