Final answer:
If firms expect increased demand, they hire more resources, which leads to economic expansion as productive activity increases.
Step-by-step explanation:
If all firms expect greater demand for their products or services, they will hire more resources (labor and capital) and the economy will experience expansion. This is consistent with the behavior of firms in a macroeconomic context. When firms anticipate an upturn in business, they seek to employ additional labor, which causes the labor demand curve to shift to the right. Consequently, if the aggregate demand for products and services increases, the economy enters a phase of expansion, characterized by increased production and employment. In contrast, a reduction in labor demand would be indicative of a slowing economy, potentially leading to a recession, and is associated with a leftward shift of the labor demand curve.