Suppose Firms Increase Investment Spending to Replace Worn-Out Equipment

question 63

Multiple Choice

Suppose firms increase investment spending to replace worn-out equipment. In the short run,aggregate demand will ________ and output will ________.

• A) increase; increase
• B) increase; decrease
• C) decrease; decrease
• D) remain unchanged; remain unchanged
• E) decrease; increase

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Definitions:

Inner Tube

A rubber tube located inside some types of tires that is inflated to hold air pressure.

E-7018 Electrode

A type of welding electrode used for shielded metal arc welding, known for its low-hydrogen coating and suitability for welding carbon steel.

Harsh Environment

A demanding or extreme condition in which equipment or individuals operate, often characterized by high pressures, temperatures, humidity, or corrosive elements.

Construction Site

A location where construction work such as building, engineering, or demolition projects is carried out.