a-firm-expects-higher-future-profits-how-is-this-likely-to-affect-its-investment

Question

A firm expects higher future profits. How is this likely to affect its investment decisions and aggregate demand?

Accepted Answer

The firm will increase investment, increasing aggregate demand.

Answer

The firm will maintain current investment levels, keeping aggregate demand constant.

Answer

The firm will decrease investment, reducing aggregate demand.

Answer

The firm will increase savings, reducing aggregate demand.