If the stock market of a country continues a steady climb upwards, consumer confidence increases, leading to:
A)increased consumption and lower aggregate demand.
B)decreased consumption and higher aggregate demand.
C)increased consumption and higher aggregate demand.
D)decreased investment and higher price level.
E)increased rates of interest and lower wage rates.

Question

Quizplus · Accepted Answer

As consumer confidence increases, people are more likely to spend money due to optimism about future earnings and job security. This will lead to increased consumption, which will in turn increase aggregate demand. Hence, choice C is the best answer.

If the Stock Market of a Country Continues a Steady