The initial impact of a sudden decrease in the expected growth rate of GDP will MOST likely be a change in _____ investment spending.

Question

Quizplus · Accepted Answer

A sudden decrease in the expected growth rate of GDP is likely to cause a decrease in planned investment spending as businesses may become more cautious about their future expectations and may delay or reduce their investment plans. Unplanned investment spending, on the other hand, refers to unexpected investments due to unforeseen circumstances such as natural disasters, and is not directly affected by changes in the expected growth rate of GDP. Therefore, the most likely impact would be on planned investment spending only.

The Initial Impact of a Sudden Decrease in the Expected