Which of the Following Events Would Most Likely Reduce Aggregate

question 131

Multiple Choice

Which of the following events would most likely reduce aggregate demand?

• A) a reduction in the amount of existing capital stock
• B) a reduction in business and personal tax rates
• C) an increase in expected returns on investment
• D) an increase in real interest rates

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Definitions:

Fair Value

The estimated market value of an asset or liability, reflecting the price that two willing parties would agree to in an arm's length transaction.

Held-to-maturity

A category for debt securities that a company has the positive intent and ability to hold until maturity, reported at amortized cost.

Long-term Investment

Assets purchased by a company to hold for more than one year, typically including stocks, bonds, or real estate.

Voting Stock

Shares that give the shareholder the right to vote on matters of corporate policy and the election of the board of directors.