Higher Gas Prices, Frugal Consumers, and Economic Fluctuations. Suppose gasoline prices increased sharply and consumers became fearful of owning too many expensive cars. As a consequence, they cut...

Higher Gas Prices, Frugal Consumers, and Economic Fluctuations. Suppose gasoline prices increased sharply and consumers became fearful of owning too many expensive cars. As a consequence, they cut back on their purchases of new cars and decided to increase their savings. How would this behavior shift the aggregate demand curve? Using the short-run aggregate supply curve, what will happen to prices and output in the short run?