The investment demand curve will shift to the right as a result of
A) an increase in the excess production capacity available in industry.
B) an increase in business taxes.
C) technological progress.
D) an increase in the acquisition and maintenance cost of capital goods.

Question

Quizplus · Accepted Answer

Technological progress leads to increased productivity and efficiency, which increases the expected return on investment, leading to an increase in investment demand, and a rightward shift of the investment demand curve. The other choices would decrease expected returns on investment and decrease investment demand.

The Investment Demand Curve Will Shift to the Right as a Result