High Self-esteem = Higher Prices

Confidence is a factor that affects aggregate demand. In the US, it seems that there is a rise in consumer’s confidence. The Board’s index of consumer attitudes rose to 57.9 from a  52.3 in March. The increasing confidence was caused by growing optimism about the labor market.

Consumer Confidence and Aggregate Demand

In the graph above, the aggregate demand increases. This is because the consumer confidence increased too. Since the aggregate demand increased, the quantity and the price increased too.


No Responses to “High Self-esteem = Higher Prices”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: