What Is the Main Effect of a Decrease in the Stock

question 105

Multiple Choice

What is the main effect of a decrease in the stock of capital?  

• A) a leftward shift of the aggregate demand curve 
• B) a rightward shift of the aggregate demand curve 
• C) a leftward shift of the long-run aggregate supply curve 
• D) a rightward shift of the short-run aggregate supply curve

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Definitions:

Immigration Law

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Progressive Taxation

A tax system in which the tax rate increases as the taxable amount increases, often designed to distribute the tax burden more evenly across various income levels.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in GDP, real income, employment, and other indicators.

Economy Shrinks

A period during which an economy experiences negative growth, leading to a reduction in production, employment, and other economic activities.