An Effort by the Fed to Reduce Aggregate Demand May

question 160

Multiple Choice

An effort by the Fed to reduce aggregate demand may be thwarted because

• A) investment could remain the same or increase because of optimistic expectations by businesses about the future of the economy.
• B) investment and interest rates are positively related.
• C) investment could fall because of pessimistic expectations.
• D) taxes may have been increased.

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Definitions:

Entrepreneurship

The process of designing, launching, and running a new business, usually starting as a small enterprise.

Managing

The process of organizing, planning, leading, and controlling resources and tasks to achieve specific business objectives.