Which of the following is likely to occur if people reduce their spending because they are worried about an economic downturn,ceteris paribus?
A) Aggregate supply will decrease or shift to the left
B) Aggregate supply will increase or shift to the right
C) Aggregate demand will increase or shift to the right
D) Aggregate demand will decrease or shift to the left

Question

Quizplus · Accepted Answer

If people reduce their spending because they are worried about an economic downturn, it would lead to a decrease in the overall demand for goods and services in the economy. This, in turn, would cause a decrease in aggregate demand and shift the aggregate demand curve to the left.

Which of the Following Is Likely to Occur If People