The recession of 2007-2009 made many consumers pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?
A) This will shift the aggregate demand curve to the left.
B) This will move the economy up along a stationary aggregate demand curve.
C) This will shift the aggregate demand curve to the right.
D) This will move the economy down along a stationary aggregate demand curve.
A
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Referring to a production possibilities curve and the goods being compared, depict the economic event. The bubonic plague (Black Death) in the 1300s killed one-third of Europe's population (capital goods vs. consumer goods).
A. A movement from a point inside the curve to a point on or near the curve B. A movement from a point on or near the curve to a point inside the curve C. A shift in the entire curve to the right (outward) D. A shift in the entire curve to the left (inward)
Real wages would rise if the prices of goods and services
A. rose more rapidly than nominal wage rates. B. and wage rates both fell. C. rose less rapidly than nominal wage rates. D. and wage rates both rose.
The certainty equivalent of a gamble is negative when tastes are risk loving.
Answer the following statement true (T) or false (F)
In general, a "big ticket item" such as a house or new car will
A) tend to have a more inelastic demand the more time that passes. B) tend to have an inelastic demand because spending on the item takes up a large share of the average consumer's budget. C) tend to have an inelastic demand because it has many substitutes. D) tend to have a more elastic demand than a lower-priced good.