Investment spending tends to be closely related to the current pace of economic growth.

Question

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Investment spending, which refers to the purchase of capital goods like machinery, buildings, and equipment, is often considered a leading indicator of economic growth. When businesses are confident about the future, they are more likely to make investments to expand their operations and increase production capacity. Thus, investment spending tends to rise during periods of strong economic growth and fall during recessions.

Investment Spending Tends to Be Closely Related to the Current