Identify the most likely impact of a decrease in the wealth of consumers in an economy,other things remaining constant.
A)A leftward shift of the aggregate supply curve
B)A leftward shift of the aggregate demand curve
C)An upward movement along the aggregate demand curve
D)A downward movement along the aggregate demand curve
E)A steeper aggregate supply curve

Question

Quizplus · Accepted Answer

A decrease in the wealth of consumers would lead to a decrease in their purchasing power and reduce their ability to buy goods and services. This would cause a leftward shift of the aggregate demand curve as overall demand in the economy decreases.

Identify the Most Likely Impact of a Decrease in the Wealth