Question

Tourists flock to the United States for vacation after disposable income rises in Europe. Which determinant of aggregate demand causes the change? (Only choose one)
a)Price
b)Net exports
c)Investment Spending
d)Government Spending (This one is wrong)
e)Consumer Spending
f)Productivity
g)Resource Cost
h)Government intervention
i)None of the above

Answer 1

The determinant of aggregate demand that causes the change would be: Consumer spending

Disposable incomes mean the total income after some part of it has been allocated into saving.
An increase in disposable income means that the people have MORE MONEY TO SPEND for whatever they want, including travelling.