Question

suppose that consumers in turkey become more pessimistic about the health of thr turkish economy due to the bad news from europe and they started to expect a decline in their future income using AD-AS model what will happen to the output and price level in the short run? does the economy enter to a burst or boom period.

Answer 1

when people are waiting decline in their future income, they more saving and less spend. The demand is decreased.

The economy enter to a burst.