You read in the paper that there has been a significant increase in the consumer confidence index.Having taken an economics class,you predict that spending in the economy will ________ and aggregate demand will ________.
A) decrease; increase
B) decrease; decrease
C) increase; be unaffected
D) increase; decrease
E) increase; increase

Question

Quizplus · Accepted Answer

An increase in the consumer confidence index means that people are more likely to spend money, which will lead to an increase in aggregate demand. Therefore, the correct choice is E, increase in both spending and aggregate demand.

You Read in the Paper That There Has Been a Significant