Question

If consumer debt increases as a result of a nationwide spending spree, then...

A)there is a movement down the AD curve as output decreased.
B)AD shifts right and output would decrease.
C)AD shifts right and output would increase.
D)AD shifts left and output would decrease.
E)AD shifts left and the output would increase.

Answer 1

The correct answer is D) AD shifts left and output would decrease.

Answer 2

The right answer for the question that is being asked and shown above is that: "C)AD shifts right and output would increase. " If consumer debt increases as a result of a nationwide spending spree, then AD shifts right and output would increase.