Suppose the majority of students who are graduating in May from a large university have found jobs and signed employment contracts by February.Starting in February,these students are likely to ________ spending and shift the aggregate demand curve________.
A) increase; to the left
B) decrease; to the right
C) decrease; to the left
D) increase; to the right
E) not change their rate of; to the right

Question

Quizplus · Accepted Answer

If the majority of students have found jobs and signed contracts by February, they are likely to increase their spending as they have a source of income. This would shift the aggregate demand curve to the right since there is an increase in demand for goods and services.

Suppose the Majority of Students Who Are Graduating in May