If consumption increases, the aggregate demand curve will:
A) shift to the left.
B) shift to the right.
C) remain unchanged, but the economy will move upward along the curve to a higher quantity demanded.
D) remain unchanged, but the economy will move downward along the curve to a lower quantity demanded.

Question

Quizplus · Accepted Answer

An increase in consumption will shift the aggregate demand curve to the right, as it represents an increase in overall spending in the economy. This will lead to an increase in the equilibrium quantity of output and overall price levels.

If Consumption Increases, the Aggregate Demand Curve Will