An increase in expected future income will
A) increase aggregate demand and aggregate supply.
B) decrease aggregate demand and aggregate supply.
C) increase aggregate supply.
D) increase aggregate demand.

Question

Quizplus · Accepted Answer

An increase in expected future income will lead consumers to expect that they will have more disposable income in the future. As a result, they may increase their current consumption, leading to an increase in aggregate demand.

An Increase in Expected Future Income Will