Question: Explain and draw a graph to illustrate how increasing consumer confidence influences aggregate expenditure and aggregate demand. Consumer sentiment was up in August, helped by

Explain and draw a graph to illustrate how increasing consumer confidence influences aggregate expenditure and aggregate demand.

Consumer sentiment was up in August, helped by merchant discounts, especially from auto dealerships who received incentives from automakers Honda, General Motors, and Toyota to lower prices. But consumers are worried about the future. They are worried about tax changes and government budget cuts that are on the horizon. Capital spending fell somewhat.

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