What effect would faster growth rates by a major trading partner,combined with an increase in stock market wealth,have on aggregate demand (AD)?
A)AD would increase.
B)AD could either increase or decrease, depending on which change was of a greater magnitude.
C)AD would stay the same.
D)AD would decrease.

Question

Quizplus · Accepted Answer

Faster growth rates by a major trading partner would lead to an increase in exports and foreign investment, which would increase overall demand for domestically produced goods and services, thereby increasing aggregate demand. Increased stock market wealth may also contribute to an increase in consumer spending, further boosting aggregate demand.

What Effect Would Faster Growth Rates by a Major Trading