In the simple macro model,desired investment expenditure will generally fall as a result of which of the following changes?
A)a decrease in business confidence
B)a decrease in interest rates
C)an increase in government purchases
D)an increase in sales volume
E)an increase in business confidence

Question

Quizplus · Accepted Answer

According to the simple macro model, desired investment expenditure is primarily affected by business confidence. When business confidence decreases, firms become less optimistic about future profits and are less likely to invest in new projects. This leads to a decrease in desired investment expenditure.

In the Simple Macro Model,desired Investment Expenditure Will Generally Fall