An increase in expected future income
A) increases the aggregate quantity demanded.
B) decreases aggregate demand.
C) decreases the aggregate quantity demanded.
D) increases aggregate demand.

Question

Quizplus · Accepted Answer

An increase in expected future income would lead to an increase in consumption expenditure, which in turn would lead to an increase in aggregate demand. Therefore, the correct answer is D - it increases aggregate demand.

An Increase in Expected Future Income