The investment-demand curve will shift to the right as a result of:
A)an increase in the excess productive capacity available in industry.
B)an increase in business taxes.
C)technological progress.
D)an increase in the acquisition and maintenance cost of capital goods.

Question

Quizplus · Accepted Answer

Technological progress tends to increase productivity and profitability, which leads to an increase in expected returns on investment. As a result, businesses will be more willing to invest, causing the investment-demand curve to shift to the right. The other choices would likely have the opposite effect, shifting the curve to the left.

The Investment-Demand Curve Will Shift to the Right as a Result