If firms become more pessimistic about future sales,then
A)The AD curve will shift to the right.
B)The AD curve will shift to the left.
C)There will be a rightward movement along the AD curve.
D)There will be a leftward movement along the AD curve.

Question

Quizplus · Accepted Answer

When firms become more pessimistic about future sales, they are likely to reduce investment and possibly other expenditures, leading to a decrease in aggregate demand. This is represented by a leftward shift of the Aggregate Demand (AD) curve.

If Firms Become More Pessimistic About Future Sales,then