If Firms' Expectations About the Future Become Pessimistic So That

question 148

Multiple Choice

If firms' expectations about the future become pessimistic so that they think future profits will be lower,then

• A)aggregate demand decreases and the AD curve shifts leftward.
• B)aggregate demand increases and the AD curve shifts rightward.
• C)the quantity of real GDP demanded decreases,and there is a movement up along the AD curve.
• D)the quantity of real GDP demanded increases,and there is a movement down along the AD curve.
• E)the aggregate demand curve does not shift,but potential GDP decreases.

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Definitions:

Intellectual Property

Legal rights conferred to creators for their inventions, literary and artistic works, designs, symbols, names, and images used in commerce.

Mental Creativity

The ability to generate innovative ideas, solutions, or artistic expressions, demonstrating human imagination and original thought.

Real Property

Land and anything permanently affixed to it, such as buildings and other structures.

Fealty

A medieval concept referring to the loyalty and duty of a vassal to a lord, often associated with the feudal system.