A widespread wave of pessimism about future consumer demand leads many firms to decrease their planned capital expenditures, even though the current level of national income has not changed. How would this event be represented on a graph plotting aggregate demand against national income?
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A widespread wave of pessimism about future consumer demand leads many firms to decrease their planned capital expenditures, even though the current level of national income has not changed. How would this event be represented on a graph plotting aggregate demand against national income?
Differentiating Economic Shocks on Aggregate Demand
In a standard model where aggregate demand is plotted against national income, each of the following events would cause a parallel upward shift in the aggregate demand curve, EXCEPT: