During the 2000s, Americans dramatically increased their personal debt. This is an example of a:
A) negative aggregate demand shock.
B) positive aggregate demand shock.
C) rightward movement along the IS curve.
D) positive aggregate supply shock.
E) Not enough information is given.

Question

Quizplus · Accepted Answer

An increase in personal debt means that individuals have more spending power, which increases aggregate demand. Therefore, this is a positive aggregate demand shock.

During the 2000s, Americans Dramatically Increased Their Personal Debt