A decrease in sales expectations may shift the AD curve to the
A)Left,causing more undesired investment.
B)Left,causing less undesired investment.
C)Right,causing more undesired investment.
D)Right, causing less undesired investment.

Question

Quizplus · Accepted Answer

A decrease in sales expectations will lead to a decrease in consumption and therefore a decreased demand for goods and services. As a result, the AD (Aggregate Demand) curve will shift to the left. This would cause more undesired investment as there would be an excess amount of goods and services left in the economy that are not being consumed, leading to a surplus.

A Decrease in Sales Expectations May Shift the AD Curve