Which of the Following Would Be Most Likely to Cause

question 158

Multiple Choice

Which of the following would be most likely to cause a reduction in current aggregate demand in the United States?

• A) increased fear of a recession
• B) an increase in the expected rate of inflation
• C) a sharp increase in the value of stocks owned by Americans
• D) a rapid increase in the growth of income in Canada, Mexico, and Western Europe

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Definitions:

Expected Rate

The predicted average rate of return or growth, based on historical data or statistical analysis, applicable to investments or economic variables.

Risk-Free Asset

is an investment that is expected to deliver a guaranteed return with no risk of financial loss.

Expected Rate

Anticipated return on an investment, often considering the risk and time value of money.

Standard Deviation

Standard deviation quantifies the amount of variation or dispersion of a set of values, indicating how much the values differ from the mean.