A decrease in consumption expenditure resulting from a decrease in expected future consumer income results in
A) a leftward shift of the aggregate demand curve.
B) a rightward shift of the aggregate demand curve.
C) an upward movement along the aggregate demand curve.
D) a downward movement along the aggregate demand curve.

Question

Quizplus · Accepted Answer

A decrease in expected future consumer income reduces consumer confidence, resulting in a decrease in current consumption expenditure. This leads to a leftward shift of the aggregate demand curve as the demand for goods and services decreases.

A Decrease in Consumption Expenditure Resulting from a Decrease in Expected