Which of the following would cause aggregate demand to decrease in a country's economy?
A) The sense of future income decreases.
B) Improvements are observed in the economic conditions in other countries.
C) Tax decreases are passed.
D) The value of the country's currency depreciates.

Question

Quizplus · Accepted Answer

A decrease in the sense of future income leads consumers to spend less and save more, anticipating lower income levels ahead. This reduction in consumer spending directly decreases aggregate demand.

Which of the Following Would Cause Aggregate Demand to Decrease