Expectations of an improving economy will generally cause an increase in investment by shifting the investment demand curve to the right.

Question

Quizplus · Accepted Answer

An improving economy generally means that there will be increased opportunities for investment and higher potential returns. As a result, investors will be more willing to invest, which will shift the investment demand curve to the right. This will result in higher investment levels at every interest rate.

Expectations of an Improving Economy Will Generally Cause an Increase