Posted by Sammy on .
If the government announced the economy is headed into an expansionary period of rising real GDP and prices, businesses would most likely respond by:
a. lowering wages so that they could afford to hire more workers
b. dismantling some of existing production facilities
c. outsourcing fewer jobs to foreign countries
d. increasing their spending on new capital
i think the answer is A but im not sure
Try some of the following links for verification and ideas:
If the economy is expanding, wouldn't businesses also want to expand?
Yes. I agree with D.