For a given level of inflation, 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)short-run aggregate supply line; downward
C)aggregate demand curve; left
D)short-run aggregate supply line; upward

Question

Quizplus · Accepted Answer

A sudden decrease in business confidence, and the resultant decrease in capital investment spending, shifts the AD curve to the left.

For a Given Level of Inflation, If Concerns About Future