Question

If businesses buy fewer capital goods, and nothing else changes, then total expenditures on U.S. goods and services will decrease. And if total expenditures decrease, then __________ will decrease; consequently, the __________ curve will shift __________.

Answer 1

short-run aggregate supply (SRAS); SRAS; leftward

Step-by-step explanation:

short-run aggregate supply (SRAS); SRAS; leftward

Fall in purchase of capital goods decreases the production of firms and as a result, supply of goods and services decreases in the economy which causes leftward shift of SRAS curve.