For a given level of inflation, if a stock market crash makes consumers less willing to spend (the wealth effect), then the aggregate demand curve shifts left.

Name: For a given level of inflation, if a stock market crash makes consumers less willing to spend (the wealth effect), then the aggregate demand curve shifts left.
Brand: Quizplus
Rating: 4.9 (35 reviews)

Question

Quizplus · Accepted Answer

A decrease in consumer spending due to a stock market crash would lead to a decrease in aggregate demand, causing the aggregate demand curve to shift to the left.

For a Given Level of Inflation, If a Stock Market