If consumers change their saving and spending plans, there will be:
A) a movement along the aggregate-demand curve
B) no effect on the aggregate-demand curve
C) a shift of the aggregate-demand curve
D) a shift of the aggregate-supply curve

Question

Quizplus · Accepted Answer

Changes in consumer saving and spending plans will result in a shift of the aggregate-demand curve because they will change the overall level of consumption and investment in the economy. When consumers save more, it reduces the total demand for goods and services, which shifts the aggregate-demand curve to the left. When consumers spend more, it increases the demand for goods and services, which shifts the aggregate-demand curve to the right. Therefore, changes in consumer saving and spending plans have a significant impact on the overall level of demand in the economy, resulting in a shift of the aggregate-demand curve.

If Consumers Change Their Saving and Spending Plans, There Will