In the short run,a decrease in consumption growth will cause the real GDP growth to:
A) increase.
B) decrease.
C) remain unchanged.
D) become unpredictable.

Question

Quizplus · Accepted Answer

A decrease in consumption growth indicates that people are spending less, which can lead to a decrease in demand for goods and services. This decrease in demand can lead to a decrease in production and thus a decrease in real GDP growth. Therefore, the best choice is B) decrease.

In the Short Run,a Decrease in Consumption Growth Will Cause