If the expected profitability of a business activity increases, we would expect investment spending to:
A) increase.
B) decrease.
C) remain constant.
D) There is not enough information to determine what would happen.

Question

Quizplus · Accepted Answer

When the expected profitability of a business activity increases, it becomes more attractive for investors to put their money there. This would lead to an increase in investment spending.

If the Expected Profitability of a Business Activity Increases, We