Why is investment demand more unstable than personal consumption?
A) Because business decisions are often made based on the expectations, and moods of optimism and pessimism concerning future economic conditions.
B) Because business decisions are often made based only on interest rates.
C) Because business decisions are made more often than personal purchasing decisions.
D) Because personal purchasing decisions are often made based on the forecasts of future sales.

Question

Quizplus · Accepted Answer

Investment demand is more unstable than personal consumption because business decisions are often made based on expectations and moods of optimism and pessimism concerning future economic conditions. Personal consumption decisions are generally based on individual needs and desires, which tend to be less influenced by external factors.

Why Is Investment Demand More Unstable Than Personal Consumption