A decrease in expected returns on investment will most likely shift the AD curve to the
A) right because C will increase.
B) left because C will decrease.
C) right because I $$I _ { g }$$ will increase.
D) left because I $$I _ { g }$$ will decrease.

Question

Quizplus · Accepted Answer

A decrease in expected returns on investment typically leads to a reduction in investment spending (denoted as I or $$I _ { g }$$ in some contexts). This reduction in investment spending decreases the overall demand in the economy, which is represented by a leftward shift of the Aggregate Demand (AD) curve.

A Decrease in Expected Returns on Investment Will Most Likely IgI _ { g }Ig​

A Decrease in Expected Returns on Investment Will Most Likely $I _ { g }$