In a graph of the aggregate demand curve,a decrease in investment by businesses is represented by a:
A) Leftward shift of the curve.
B) Rightward shift of the curve.
C) Movement up the curve.
D) Movement down the curve.

Question

Quizplus · Accepted Answer

A decrease in investment by businesses would lead to a decrease in overall spending in the economy, which would cause a leftward shift of the aggregate demand curve. This is because with less investment, there will be less demand for goods and services, which will reduce overall economic output.

In a Graph of the Aggregate Demand Curve,a Decrease in Investment