Which of the following is likely to increase investment and,as a result,increase aggregate demand?
A)decreased business taxes
B)higher interest rates
C)pessimistic business forecasts
D)an increase in inventory levels

Question

Quizplus · Accepted Answer

Decreased business taxes would increase business profits, making it more attractive to invest in capital projects, thereby increasing investment and aggregate demand.

Answer: D 
 An increase in inventory levels indicates that businesses are expecting an increase in demand for their products, so they may invest more in capital projects to expand their production capacity, thereby increasing investment and aggregate demand.

Which of the Following Is Likely to Increase Investment And,as