Business investment spending is motivated by the expected profits of its prospective investments which, in turn, is affected by the expected future state of the overall economy.

Question

Quizplus · Accepted Answer

Business investment spending is indeed motivated by the anticipated profitability of future investments, which is closely linked to expectations about the future state of the economy. Businesses are more likely to invest when they expect the economy to grow, as this typically leads to higher demand for their products or services, thereby increasing the potential profits from their investments. Conversely, if the economic outlook is poor, businesses may be more cautious about investing.

Business Investment Spending Is Motivated by the Expected Profits of Its