Question

Describe whether the following changes cause the aggregate demand curve to increase, decrease, or neither.

consumption Increases

Answer 1

Consumption increases cause the aggregate demand curve to shift to the right.

Step-by-step explanation:

An increase in consumption is one of the components that contribute to the aggregate demand (AD). When consumption increases, it leads to an increase in aggregate demand, causing the AD curve to shift to the right.

For example, when consumers have more disposable income, they tend to spend more on goods and services. This increase in consumer spending will lead to an increase in aggregate demand.