What would be an economist's opinion of the statement: "It is possible for aggregate demand to be reduced by high and rising consumer debt"?
A)They would disagree because rising debt won't lead consumers to decide to reduce their spending.
B)They would agree because rising debt may lead consumers to decide to reduce their spending.
C)They would disagree because consumers are responsible for all fluctuations in the economy.
D)They would agree because consumers are responsible for all fluctuations in the economy.

Question

Quizplus · Accepted Answer

Economists would agree with the statement that it is possible for aggregate demand to be reduced by high and rising consumer debt because as consumers accumulate more debt, they may become more cautious in their spending and choose to save rather than spend. This decrease in consumer spending can then lead to a decrease in aggregate demand in the economy.

What Would Be an Economist's Opinion of the Statement: "It