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:

Reinvested Interest

Reinvested interest is the compounding of interest by adding the payments back to the principal amount instead of paying it out, thereby increasing the total interest earned over time.

Simple Interest

Interest calculated only on the principal amount of a loan or investment, not on any previously earned interest.

Account Balance

The total amount of money present in an account at a given point in time, considering all credits and debits.

Funds

Capital set aside for specific purposes or investments.