Assume that the economy is in a recession and consumers are expecting a fall in their income levels.This will cause a(n)________.

Question

Quizplus · Accepted Answer

When consumers expect a fall in their income levels, especially during a recession, they are likely to reduce their spending. This anticipation of lower income leads to a decrease in demand for goods and services, represented by a leftward shift in the market demand curve. This is because consumers' willingness and ability to purchase goods at various prices decreases.

Assume That the Economy Is in a Recession and Consumers