If businesses expect future demand to increase, this will cause a:
A)movement down the aggregate demand curve.
B)movement up the aggregate demand curve.
C)rightward shift of the aggregate demand curve.
D)leftward shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

When businesses expect future demand to increase, they are likely to increase investment and production in anticipation of higher sales. This increase in investment and production raises the overall demand for goods and services in the economy, leading to a rightward shift of the aggregate demand curve. This shift represents an increase in demand at all price levels, not just a movement along the curve.

If Businesses Expect Future Demand to Increase, This Will Cause