Fluctuations in economy-wide investment spending have two sources:
A) changes in interest rates and changes in business managers' confidence.
B) changes in tax rates and changes in interest rates.
C) changes in regulations and changes in tax rates.
D) changes in stock prices and changes in interest rates.

Question

Quizplus · Accepted Answer

Fluctuations in economy-wide investment spending are primarily driven by changes in interest rates, which affect the cost of borrowing for investment, and changes in business managers' confidence, which influence their willingness to invest. These factors directly impact investment decisions and spending levels.

Fluctuations in Economy-Wide Investment Spending Have Two Sources