Question

For a given inflation rate, if a rise in the stock market makes consumers more willing to spend, then the ______ shifts _____.
a. aggregate demand curve; right
b. aggregate demand curve; left
c. aggregate supply curve; left
d. aggregate supply curve; right

Answer 1

Answer:

A- aggregate demand curve; right

Explanation:

Since the consumers are willing to spend more, the demand for goods will increase hence causing the demand curve to shift to the right. This means that the consumer might be willing to pay a higher price if the demand increases and supply is constant. This is because the demand for good increases and people are willing to pay more.