Identify the most likely impact of a decrease in the wealth of consumers in an economy, other things remaining constant.
A) a leftward shift of the aggregate supply curve
B) a leftward shift of the aggregate demand curve
C) an upward movement along the aggregate demand curve
D) a downward movement along the aggregate demand curve
E) an increase in the slope of the aggregate supply curve

Question

Quizplus · Accepted Answer

A decrease in the wealth of consumers would lead to a decrease in their ability to spend, thereby reducing aggregate demand. This would result in a leftward shift of the aggregate demand curve.

Identify the Most Likely Impact of a Decrease in the Wealth