Suppose a Fall in Stock Prices Makes People Feel Less

question 203

Multiple Choice

Suppose a fall in stock prices makes people feel less wealthy. What are the effects of this decrease in wealth?

• A) decreased consumption, shown as a movement to the left along a given aggregate-demand curve
• B) increased consumption, shown as a movement to the right along a given aggregate-demand curve
• C) decreased consumption, which shifts the aggregate-demand curve to the left
• D) increased in consumption, which shifts the aggregate-demand curve to the right

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Definitions:

College Student

An individual who is enrolled in and attending courses at a college or university.

Interquartile Range

A measure of variability, calculated as the difference between the upper and lower quartiles, indicating the spread of the middle 50% of the dataset.

Range

The difference between the highest and lowest values in a dataset, providing a measure of the overall spread.

Variance

A measure of the dispersion indicating how far each number in the set is from the mean and from each other.