An increase in consumer spending caused by an increase in consumer confidence would cause
A)the aggregate demand curve to shift up and to the right.
B)the aggregate demand curve to shift down and to the left.
C)a movement down and to the right along the aggregate demand curve.
D)a movement up and to the left along the aggregate demand curve.

Question

Quizplus · Accepted Answer

An increase in consumer spending leads to an increase in consumption (C) component of aggregate demand. This causes the aggregate demand curve to shift up and to the right, reflecting a higher level of real GDP demanded at each price level.

An Increase in Consumer Spending Caused by an Increase in Consumer