John is expecting to get a hike in his salary after 3 months.Assuming all else equal,this is likely to cause a(n)________ his current credit demand curve.

Question

Quizplus · Accepted Answer

Anticipating a higher future income, John is likely to feel more confident in borrowing more now, leading to an increase in demand for credit. This is represented by a rightward shift of his current credit demand curve, as it reflects a change in demand at every possible interest rate, not a movement along the curve due to a change in the price of credit (interest rate).

John Is Expecting to Get a Hike in His Salary