If there is a decrease in the expected future profitability of capital
A) the aggregate demand curve will shift right.
B) the aggregate demand curve will shift left.
C) the aggregate demand curve will become steeper.
D) the aggregate demand curve will be unaffected.

Question

Quizplus · Accepted Answer

A decrease in expected future profitability of capital would lead to a decrease in investment which would, in turn, lead to a decrease in aggregate demand. This would result in a leftward shift of the aggregate demand curve.

If There Is a Decrease in the Expected Future Profitability