Which of the following will most likely increase aggregate demand?
A) A decrease in stock market prices.
B) An increase in business investment spending.
C) A decrease in the expected inflation rate.
D) A decrease in real GDP.

Question

Quizplus · Accepted Answer

An increase in business investment spending will lead to higher aggregate demand as businesses are spending more money on capital goods, increasing production and employment, and ultimately increasing spending in the economy. Decreases in stock market prices and real GDP are likely to negatively impact consumer confidence and spending, leading to a decrease in aggregate demand. A decrease in the expected inflation rate may have a positive impact on consumer spending, but it is not a significant factor in increasing aggregate demand.

Which of the Following Will Most Likely Increase Aggregate Demand