Suppose a drop in prices in the stock market makes people feel less financially secure.This would cause __________ the economy's AD curve.
A) movement down along
B) movement up along
C) a rightward shift of
D) a leftward shift of

Question

Quizplus · Accepted Answer

A drop in prices in the stock market would cause people to feel less financially secure, which in turn would reduce their willingness to consume and invest. This would lead to a decrease in aggregate demand (AD) and a leftward shift of the AD curve.

Suppose a Drop in Prices in the Stock Market Makes