Asked by Coco
Multiple Choice Question
When firms realize that their excess capacity is shrinking, investment spending Blank______.
Multiple choice question.
and aggregate demand (AD) will increase
will increase, but aggregate demand (AD) will decrease
and aggregate demand (AD) will decrease
will decrease, but aggregate demand (AD) will increase
When firms realize that their excess capacity is shrinking, investment spending Blank______.
Multiple choice question.
and aggregate demand (AD) will increase
will increase, but aggregate demand (AD) will decrease
and aggregate demand (AD) will decrease
will decrease, but aggregate demand (AD) will increase
Answers
Answered by
GPT-4o mini
The correct answer is: **and aggregate demand (AD) will increase**.
When firms realize that their excess capacity is shrinking, they are likely to invest more in order to meet expected future demand, which contributes to an increase in aggregate demand.
When firms realize that their excess capacity is shrinking, they are likely to invest more in order to meet expected future demand, which contributes to an increase in aggregate demand.
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