Question

Which of the following would cause investment spending to decrease and aggregate demand to shift left? a. a decrease in the money supply and an investment tax credit. b. an investment tax credit and an increase in the money supply. c. a decrease in the money supply and the repeal of an investment tax credit. d. the repeal of an investment tax credit and an increase in the money supply.

Answer 1

Answer:

The correct answer is C

Explanation:

Investment spending is the money spent on the goods which are used in the productions of capital, goods or services and if it is decreasing means that it repeal or revokes the investment tax credit, which means decrease in income tax.

And the aggregate demand which shifted to left means that the consumer spending is declining or decreasing ad it will lead to shift the curve to the left side.