Have no effect on aggregate demand

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Explain whether each of the following events will increase, decrease, or have no effect on aggregate demand.

a) The stock market crashes.

b) People feel pessimistic with the outlook of economy, and start to save for a rainy day.

c) The city cuts the budget and hence the spending on schools.

d) Inflation increases workers expectation on the nominal wage.

Reference no: EM132405773

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