An Increase in Household Borrowing for Consumption Will

question 84

Multiple Choice

An increase in household borrowing for consumption will:

• A)decrease aggregate demand.
• B)increase aggregate supply.
• C)increase aggregate demand.
• D)decrease aggregate supply.

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Definitions:

Economic Model

A simplified representation or framework that economists use to describe and analyze economic processes, relationships, or phenomena.

Capital Goods

Long-lasting goods purchased and used by businesses to produce goods and services and contribute to their output.

Investment

The allocation of resources, often money, into assets or projects with the expectation of generating profit or income.

Marginal Costs

The increase in the sum total of expenses that comes with the production of one additional unit of a product or service.