Which of the following will shift the investment demand curve to the right?

Question

Quizplus · Accepted Answer

An increase in GDP indicates a growing and expanding economy, which would lead to increased profits and higher dividends for investors. This would lead to a rise in investment demand and, hence, shift the investment demand curve to the right. The other options do not shift the investment demand curve to the right. A decrease in the capacity utilization rate of capital would indicate that firms are not using their capital to its fullest capacity, which would reduce the incentive to invest further. A decrease in the cost of labor might lead to higher profits for firms, but it would not necessarily lead to increased investment. The imposition of government regulations that reduce the incentive to produce would discourage investment and shift the investment demand curve to the left.

Which of the Following Will Shift the Investment Demand Curve