Suppose consumers decrease their consumption expenditure because they worry about what their income will be in the future. There is
A) a rightward shift of the aggregate demand curve.
B) an upward movement along the aggregate demand curve.
C) a downward movement along the aggregate demand curve.
D) a leftward shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

When consumers decrease their consumption expenditure due to worries about future income, it reflects a decrease in overall demand for goods and services. This scenario leads to a leftward shift of the aggregate demand curve, indicating a decrease in aggregate demand at every price level.

Suppose Consumers Decrease Their Consumption Expenditure Because They Worry About