If both consumers and businesses are pessimistic about the future of the economy
A) there is a movement up along the aggregate demand curve.
B) the aggregate demand curve shifts to the left.
C) there is a movement down along the aggregate demand curve.
D) the aggregate demand curve shifts to the right.

Question

Quizplus · Accepted Answer

When both consumers and businesses are pessimistic about the future of the economy, they tend to reduce their spending and investment, which leads to a decrease in aggregate demand. This shift is reflected in the leftward movement of the aggregate demand curve.

If Both Consumers and Businesses Are Pessimistic About the Future