Investment spending might be larger when GDP is higher.Such added investment as GDP rises is called

Question

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The added investment that occurs as GDP rises is called induced investment. This is because, as the economy expands, business profits increase and firms are more willing to invest in new projects and equipment. This results in a positive relationship between GDP and investment spending, which is known as the investment function. Option A is incorrect as there is no such thing as mutual investment. Option C is incorrect as there is no specific term known as positive investment. Option D is incorrect as net investment refers to the difference between gross investment and depreciation.

Investment Spending Might Be Larger When GDP Is Higher