When the demand curve for investment is shown on a graph, which variable is on the vertical axis and which variable is on the horizontal axis?
A) The interest rate is on the vertical axis, and investment is on the horizontal axis.
B) Investment is on the vertical axis, and the interest rate is on the horizontal axis.
C) The price level is on the vertical axis, and investment is on the horizontal axis.
D) Investment is on the vertical axis, and the price level is on the horizontal axis.

Question

When the demand curve for investment is shown on a graph, which variable is on the vertical axis and which variable is on the horizontal axis?  
A) The interest rate is on the vertical axis, and investment is on the horizontal axis. 
B) Investment is on the vertical axis, and the interest rate is on the horizontal axis. 
C) The price level is on the vertical axis, and investment is on the horizontal axis. 
D) Investment is on the vertical axis, and the price level is on the horizontal axis.

Quizplus · Accepted Answer

In economics, when graphing the demand curve for investment, the interest rate is typically placed on the vertical axis to represent the cost of borrowing, while the amount of investment is placed on the horizontal axis to represent the quantity of investment at various interest rates.

When the Demand Curve for Investment Is Shown on a Graph