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0) According to the Europes Slowing Economy article measures of confidence among consumers and businesses have been declining According to the AS/AD Model, this would tend to have which of the following effect? A Shift AS curve up and to the left B Shift AS curve down and to the right Shift AD curve up and to the right Represent a movement on the AD curve up and to the right none of the above

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Answer #1

E. None of the above. A decline in consumer confidence will shift AD to the left as AD will decrease.

It is a shift and not a movement along the curve. A movement along the curve is due to changes in price levels, keeping other factors constant.

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