Suppose a stock market boom makes people feel wealthier. The increase in wealth would cause people...
Suppose a stock market boom makes people feel wealthier. The increase in wealth would cause people to desire
increased consumption, which shifts the aggregate demand curve right.
increased consumption, which shifts the aggregate demand curve left.
decreased consumption, which shifts the aggregate demand curve right.
decreased consumption, which shifts the aggregate demand curve left.
Homework Answers
When there is increase in the wealth of the people due to stock market then there will be more consumption by this people and this will cause the shift of aggregate demand curve to the rightwards .
Leftward shift will happen only when there is a decrease in consumption .
So answer is option A.
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Suppose a stock market boom makes people feel wealthier. The
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