For a Given Inflation Rate, If Concerns About Future Weakness

question 54

Multiple Choice

For a given inflation rate, if concerns about future weakness in the economy cause businesses to reduce their spending on new capital, then the ______ shifts _____.

• A) aggregate demand curve; right
• B) aggregate demand curve; left
• C) aggregate supply curve; upward
• D) aggregate supply curve; downward

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Definitions:

Long-term Investment

Investments made by a company to hold for more than one year, often in bonds, stocks, or real estate.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Average Rate

A term often used in finance to denote the mean of various rates of interest or exchange rates over a given period.

Capital Investment

Funds invested in a business by the owners or partners for long-term growth and financial stability.