Which of the following changes would probably not lead to an increase in aggregate expenditure?
A) an increase in aggregate wage income
B) an increased mood of optimism about the nation's economic prospects
C) an increase in the value of corporate stocks
D) a decrease in the income tax rate
E) an increase in the interest rate

Question

Quizplus · Accepted Answer

An increase in the interest rate would likely lead to a decrease in borrowing and therefore a decrease in investment, consumption and aggregate expenditure. The other options would likely lead to an increase in aggregate expenditure.

Which of the Following Changes Would Probably Not Lead to an Increase