An increase in consumer pessimism will lead to increased inflation in:

Question

Quizplus · Accepted Answer

An increase in consumer pessimism typically leads to a decrease in consumer spending as individuals save more and spend less due to concerns about the future. This decrease in demand can lead to lower prices or slower price increases, which is the opposite of inflation. Therefore, consumer pessimism is not directly linked to increased inflation in either the short run or the long run.

An Increase in Consumer Pessimism Will Lead to Increased Inflation