Figure 24-1 -Refer to Figure 24-1. Ceteris paribus, an increase in firms' expectations of the future profitability of investment spending would be represented by a movement from A) AD₁ to AD₂. B) AD₂ to AD₁. C) point A to point B. D) point B to point A.

Question

Quizplus · Accepted Answer

An increase in firms' expectations of future profitability would lead to an increase in investment spending, shifting the aggregate demand curve to the right from AD1 to AD2.

Figure 24-1 -Refer to Figure 24-1. Ceteris Paribus, an Increase in Firms