Suppose That Consumers Become Pessimistic About the Future Health of the Economy

question 30

Essay

Suppose that consumers become pessimistic about the future health of the economy, and so cut back on their consumption spending. What will happen to aggregate demand and to output? What might the government have to do to keep output stable?

---

Definitions:

Immune System

The complex network of cells, tissues, and organs that work together to defend the body against infection, disease, and foreign substances.

Stress

A psychological and physical state of strain and tension resulting from demanding circumstances or situations.

B Lymphocytes

A type of white blood cell of the lymphocyte subtype that plays a significant role in the humoral immunity component of the adaptive immune system.

Stress

A state of mental or emotional strain or tension resulting from adverse or demanding circumstances.