An expected decline in the prices of consumer goods will
A) decrease aggregate demand.
B) increase the quantity of real domestic output demanded.
C) increase aggregate demand.
D) decrease the quantity of real domestic output demanded.
E) decrease savings.

Question

Quizplus · Accepted Answer

When consumers expect prices to decline in the future, they are likely to delay purchases, leading to a decrease in aggregate demand.

An Expected Decline in the Prices of Consumer Goods Will