For a given inflation rate, if bright prospects for the future of the economy cause businesses to increase spending on new capital, then the ______ shifts _____.
A)aggregate demand curve; right
B)aggregate demand curve; left
C)aggregate supply curve; left
D)aggregate supply curve; right

Question

Quizplus · Accepted Answer

When businesses increase spending on new capital due to bright economic prospects, it leads to an increase in aggregate demand, causing the aggregate demand curve to shift to the right.

For a Given Inflation Rate, If Bright Prospects for the Future