A technological change that positively affects business expectations will:
A)cause a rightward shift of the investment demand curve.
B)cause a leftward shift of the investment demand curve.
C)cause an upward movement along the investment demand curve.
D)cause a downward movement along the investment demand curve.
E)make the investment demand curve upward sloping.

Question

Quizplus · Accepted Answer

A technological change that positively affects business expectations will lead to an increase in the expected return on investment, which will cause a rightward shift of the investment demand curve. This is because businesses will be willing to invest more at every interest rate level in order to take advantage of the expected higher return on investment.

A Technological Change That Positively Affects Business Expectations Will