The Impact of Hurricane Katrina on Consumers in the Economy

question 165

Multiple Choice

The impact of Hurricane Katrina on consumers in the economy was to make them very pessimistic about their future incomes.How does this increased pessimism affect the aggregate demand curve?

• A)This will move the economy up along a stationary aggregate demand curve.
• B)This will move the economy down along a stationary aggregate demand curve.
• C)This will shift the aggregate demand curve to the left.
• D)This will shift the aggregate demand curve to the right.

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Definitions:

Public Sector

The portion of an economy that is controlled by the government, including various government services and enterprises.

Unionized

Pertains to workers who are members of a union, which negotiates collective bargaining agreements.

Monopsonist

A market condition where there is only one buyer for a product or service, giving them greater control over prices.

Labor Curve

A graphical representation showing the relationship between the wage rate and the quantity of labor workers are willing to supply.