An increase in wealth from a substantial increase in stock prices will move the economy along a
ﬁxed aggregate demand curve.

Question

Quizplus · Accepted Answer

An increase in wealth from a substantial increase in stock prices will shift the aggregate demand curve to the right, as consumers increase their spending due to their higher wealth levels. Thus, the economy would not move along a fixed aggregate demand curve.

An Increase in Wealth from a Substantial Increase in Stock