Suppose firms expect profits to increase and decide to increase investment. As a result
A. the AE curve shifts upward to a curve such as AE2 .
B. the AE curve shifts downward to a curve such as AE1 .
C. there is a movement along AE1 to a point such as B.
D. there is a movement along AE1 to a point such as C.
Answer:A
Suppose firms expect profits to increase and decide to increase investment. As a result
A. the AE curve shifts upward to a curve such as AE2 . B. the AE curve shifts downward to a curve such as AE1 . C. there is a movement along AE1 to a point such as B. D. there is a movement along AE1 to a point such as C.