Which of the following is likely to be an effect of excess capacity on the investment demand curve of an economy?
A)A leftward shift of the curve
B)A rightward shift of the curve
C)An upward movement along the curve
D)A downward movement along the curve

Question

Quizplus · Accepted Answer

Excess capacity means that firms are not using their maximum production capacity, leading to a decrease in their desired investment. This will result in a leftward shift of the investment demand curve.

Which of the Following Is Likely to Be an Effect