Which of the following will cause consumption, and as a result, aggregate demand, to decrease?
A)a tax cut
B)a fall in consumer confidence
C)increased population
D)an optimistic forecast of future income growth

Question

Quizplus · Accepted Answer

A fall in consumer confidence will cause individuals to decrease their spending and consumption, leading to a decrease in aggregate demand. A tax cut and an optimistic forecast of future income growth may increase consumption and aggregate demand. Increased population may have an ambiguous effect on consumption and aggregate demand.

Which of the Following Will Cause Consumption, and as a Result