People expect their incomes will decrease next year. As a result, the will shift .
A) short- run aggregate supply curve; rightward
B) long- run aggregate supply curve; rightward
C) aggregate demand curve; leftward
D) aggregate demand curve; rightward

Question

Quizplus · Accepted Answer

When people expect their incomes to decrease, they will reduce their spending, which will lead to a decrease in aggregate demand. This will cause the aggregate demand curve to shift leftward.

People Expect Their Incomes Will Decrease Next Year