If consumer confidence falls,then aggregate demand shifts
A)right,raising the inflation rate above its previous level.
B)right,lowering the inflation rate below its previous level.
C)left,raising the inflation rate above its previous level.
D)left,lowering the inflation rate below its previous level.

Question

Quizplus · Accepted Answer

When consumer confidence falls, people tend to save more and spend less, leading to a decrease in aggregate demand. This shift in aggregate demand leads to a leftward shift in the aggregate demand curve, resulting in a lower price level and a lower inflation rate. Therefore, the best choice is D - left, lowering the inflation rate below its previous level.

If Consumer Confidence Falls,then Aggregate Demand Shifts