A decrease in consumer spending can be expected to shift the
A) aggregate expenditures curve downward and the aggregate demand curve leftward.
B) aggregate expenditures curve upward and the aggregate demand curve leftward.
C) aggregate expenditures curve downward and the aggregate demand curve rightward.
D) aggregate expenditures curve upward and the aggregate demand curve rightward.

Question

Quizplus · Accepted Answer

A decrease in consumer spending would lead to a decrease in aggregate expenditures. This would shift the aggregate expenditures curve downward. As a result, there would be a decrease in aggregate demand which would shift the aggregate demand curve leftward.

A Decrease in Consumer Spending Can Be Expected to Shift