The determinants of investment are
A) the marginal propensity to invest and the savings rate.
B) the level of gross domestic product and the marginal propensity to spend.
C) the profit rate and the equilibrium rate.
D) business expectations and the Dow Jones Industrial Average.
E) the interest rate and the expected rate of return from capital.

Question

Quizplus · Accepted Answer

The determinants of investment are the factors that influence the decisions made by businesses and individuals to invest in capital goods or other productive assets. These factors include the interest rate, which reflects the cost of borrowing and influences the opportunity cost of investing, and the expected rate of return from capital, which reflects the potential for future profits and growth. Other factors such as business expectations and stock market performance may also play a role, but the interest rate and expected rate of return are generally considered to be the most important determinants of investment.

The Determinants of Investment Are