Final answer:
An increase in expected future income will increase aggregate demand as individuals feel wealthier and spend more. Advanced governmental spending also increases aggregate demand, whereas higher interest rates from a decreased money supply can decrease it. In financial markets, an increase in loan supply leads to more loans made and received. The correct option is a. increase aggregate demand.
Step-by-step explanation:
An increase in expected future income will most likely increase aggregate demand. When people anticipate higher future income, they often feel wealthier and are more willing to spend currently, which raises consumption. Higher consumption typically leads to an increase in aggregate demand because it makes up a large part of total economic demand. However, this does not necessarily affect aggregate supply, which is determined by the economy's ability to produce goods and services and is influenced by factors such as technology, resource availability, and the labor force.
An increase in government spending shifts the aggregate demand curve to the right, raising both income and price levels. In contrast, a decrease in the money supply would shift aggregate demand leftward, reducing income and price levels and leading to higher interest rates. Higher interest rates can reduce consumption and investments, thereby decreasing aggregate demand.
When considering changes in the financial market, a rise in the supply of loans, rather than just an increase in demand for loans, is typically what leads to an increase in the quantity of loans made and received. This is because when banks have more capital to lend, they can offer more loans at a lower interest rate, which encourages borrowing and investment.