If aggregate investment in an economy falls,which of the following is likely to happen?
A) Asset prices will rise.
B) Labor demand will increase.
C) The revenue of firms in the economy will fall.
D) The number of mortgage defaults will fall.

Question

Quizplus · Accepted Answer

A decrease in aggregate investment implies that firms are investing less in capital goods and equipment, which can lead to a decline in revenue for those firms. This can be due to decreased productivity and efficiency resulting from a lack of investment. Asset prices are unlikely to rise as a result of decreased investment, and labor demand may be negatively affected if firms are not investing in the expansion of their operations. There is no direct correlation between a decrease in investment and the number of mortgage defaults.

If Aggregate Investment in an Economy Falls,which of the Following