ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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decrease the market price of real capital goods.
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have no effect on the location of the investment-demand curve.
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shift the investment-demand curve to the right.
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shift the investment-demand curve to the left.
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Detailed explanation-1: -Other things equal, a 10 percent decrease in corporate income taxes will: have no effect on the location of the investment-demand curve. The investment demand curve will shift to the left as a result of: an increase in the excess production capacity available in industry.
Detailed explanation-2: -An increase in the level of production is likely to boost demand for capital and thus lead to greater investment. Therefore, an increase in GDP is likely to shift the investment demand curve to the right.
Detailed explanation-3: -The aggregate demand curve, or AD curve, shifts to the right as the components of aggregate demand-consumption spending, investment spending, government spending, and spending on exports minus imports-rise.
Detailed explanation-4: -Which of the following would most likely shift the aggregate demand curve to the right? An increase in stock prices that increases consumer wealth.
Detailed explanation-5: -The aggregate demand curve tends to shift to the left when total consumer spending declines. 2 Consumers might spend less because the cost of living is rising or because government taxes have increased.