What impact would a combination of the discovery of new,profitable,technological investment opportunities and inventories that have fallen far below desired levels have?
A)It would decrease the investment demand curve.
B)It could either increase or decrease the investment demand curve.
C)It would leave the investment demand curve unchanged.
D)It would increase the investment demand curve.

Question

Quizplus · Accepted Answer

The discovery of new, profitable technological investment opportunities would increase the expected rate of return on investment and therefore shift the investment demand curve to the right, increasing the demand for investment. Inventory levels falling below desired levels would also spur firms to invest in increasing production to meet demand, further increasing investment demand. Therefore, the combination of these two factors would result in an increase in the investment demand curve.

What Impact Would a Combination of the Discovery of New,profitable,technological