A decrease in investment leads to ________ in aggregate demand and ________ in real GDP.
A)no change;a decrease
B)a decrease;an increase
C)a decrease;a decrease
D)an increase;a decrease
E)an increase;an increase

Question

Quizplus · Accepted Answer

A decrease in investment will lead to a decrease in aggregate demand, as there will be less demand for goods and services from businesses. With a decrease in aggregate demand, real GDP will also decrease as there will be less production and income in the economy.

A Decrease in Investment Leads to ________ in Aggregate Demand