Which of the following will cause the investment function to shift upward?
A) A decrease in government subsidies to businesses
B) An increase in business profits
C) A decline in capacity utilization
D) Expectations of higher business taxes
E) An increase in the market rate of interest

Question

Quizplus · Accepted Answer

An increase in business profits will increase the amount of funds available for investment, resulting in an upward shift of the investment function.

Which of the Following Will Cause the Investment Function to Shift