An Expected Decline in the Prices of Consumer Goods Will

question 44

Multiple Choice

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.

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Definitions:

Disposable Income

Financial resources at the disposal of households for the aims of saving and spending after income tax engagements.

Saving

The portion of income not spent on consumption or taxes, typically put aside for future use or investment.

APC

The acronym for Average Propensity to Consume, which measures the fraction of income that households spend on goods and services rather than saving.

Disposable Income

The cash pile households can utilize for their spending and savings needs after income taxes are handled.