Suppose a Fall in Stock Prices Makes People Feel Poorer

question 204

Multiple Choice

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

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

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