When the stock market continues a steady climb upwards,this increases consumer confidence and wealth.What impact does this have on consumption and aggregate demand?
A)Consumption decreases and aggregate demand increases.
B)Consumption and aggregate demand both decrease.
C)Consumption and aggregate demand both increase.
D)Consumption increases and aggregate demand decreases.

Question

Quizplus · Accepted Answer

When the stock market continues to climb upwards, consumers feel more confident and see an increase in their wealth. This leads to an increase in consumption as people are more willing to spend money, leading to an increase in aggregate demand.

When the Stock Market Continues a Steady Climb Upwards,this Increases