An increase in wealth from a substantial increase in stock prices will move the economy along a fixed aggregate demand curve.

Name: An increase in wealth from a substantial increase in stock prices will move the economy along a fixed aggregate demand curve.
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Question

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An increase in wealth from rising stock prices shifts the aggregate demand curve to the right, as consumers feel wealthier and are likely to spend more, increasing overall demand in the economy.

An Increase in Wealth from a Substantial Increase in Stock