An Increase in Investment, Combined with an Increase in Imports

question 191

Multiple Choice

An increase in investment, combined with an increase in imports, would have what effect on aggregate demand?

• A)​AD would increase.
• B)​AD would decrease.
• C)​AD would stay the same.
• D)​AD could either increase or decrease, depending on which change was of a greater magnitude.

---

Definitions:

Proxy Variable

A variable used in place of another variable that is not directly measurable or accessible, often because of practical limitations.

Happiness

Happiness is a state of well-being and contentment characterized by emotions ranging from contentment to intense joy; it reflects subjective evaluations of life satisfaction and emotional experiences.

External Validity

The extent to which the results of a study can be generalized to other situations and to other people.

Psychological Studies

The scientific research and analysis of human behavior, thought processes, and emotions.