Which of the following would cause investment spending to increase and aggregate demand to shift right?
A)an increase in the money supply, but not an investment tax credit
B)an investment tax credit, but not an increase in the money supply
C)both an increase in the money supply and an investment tax credit
D)None of the above are correct.

Question

Quizplus · Accepted Answer

An increase in the money supply typically lowers interest rates, encouraging more investment spending. An investment tax credit directly incentivizes businesses to invest by reducing their tax burden. Both factors would increase investment spending and shift aggregate demand to the right.

Which of the Following Would Cause Investment Spending to Increase