Generally speaking, when aggregate output does ________ , investment does ________.

Question

Quizplus · Accepted Answer

When aggregate output is performing poorly, there is typically lower demand and lower profits, which reduces the incentive for investment. On the other hand, when aggregate output is performing well, there is generally higher demand and higher profits, which increases the incentive for investment. Therefore, when output is poor, investment tends to be poor as well.

Generally Speaking, When Aggregate Output Does ________ , Investment Does