how do future expectations of an improving economy affect aggregate demand?
a) the government will cut regulations to boost aggregate demand.
b) the business sector will expand investments and boost aggregate demand.
c) the central bank will cut interest rates and decrease aggregate demand.
d) the government will increase spending for goods and services and decrease aggregate demand

B) The business sector will expand investments and boost aggregate demand.

Explanation:

Aggregate demand is the sum of demand from all economic agents in an economy: government, firms and consumers. In economic theory, the central element underlying consumer and investment decisions is the expectation of economic agents for the future. When expectations are pessimistic, companies lay off, investments shrink and consumption falls. All this leads to the economy falling aggregate demand. In contrast, when expectations for the future are positive, the private sector invests, generating jobs and leading to increased consumption and aggregate demand. In this case, a virtuous cycle for the economy begins.

march 8, 1917

explanation: