Which of the following will cause consumption, and as a result, aggregate demand, to decrease?
A)a tax cut
B)a decrease in consumer confidence
C)increased population
D)an optimistic forecast of future income growth

Question

Which of the following will cause consumption, and as a result, aggregate demand, to decrease?
A)​a tax cut
B)​a decrease in consumer confidence
C)​increased population
D)​an optimistic forecast of future income growth

Quizplus · Accepted Answer

A decrease in consumer confidence will cause people to spend less, leading to a decrease in consumption and aggregate demand. A tax cut, increased population, and an optimistic forecast of future income growth would all lead to an increase in consumption and aggregate demand.

Which of the Following Will Cause Consumption, and as a Result