The correct answer is:
a decline in firms' expected returns.
This is because a decrease in investment generally occurs when firms anticipate lower profitability or returns on their investments, leading to a reduction in aggregate demand.
Multiple Choice Question
A decrease in investment and subsequent shift of the aggregate demand curve to the left is due to Blank______.
Multiple choice question.
an increase in the general price level
a decline in firms' expected returns
a decrease in long-term interest rates
an increase in firms' expected returns
1 answer