For a given inflation rate, if concerns about future weakness in the economy cause businesses to reduce their spending on new capital, then the ______ shifts _____.
A)aggregate demand curve; right
B)aggregate demand curve; left
C)aggregate supply curve; left
D)aggregate supply curve; right

Question

Quizplus · Accepted Answer

If businesses reduce their spending on new capital, then the aggregate demand curve will shift left. This is because aggregate demand is the total demand for goods and services in an economy, and if businesses are spending less on new capital, then they are demanding less goods and services.

For a Given Inflation Rate, If Concerns About Future Weakness