A cut in government spending, a decrease in income abroad, an increase in taxes or an expectation that future consumer income will fall will all cause aggregate:

Question

Quizplus · Accepted Answer

A cut in government spending, a decrease in income abroad, an increase in taxes or an expectation that future consumer income will fall are all factors that decrease the overall purchasing power of consumers, leading to a decrease in their demand for goods and services. Therefore, aggregate demand will shift inward.

A Cut in Government Spending, a Decrease in Income Abroad