Which would increase real planned investment demand?
A)a decrease in new technologies available
B)a decline in profit expectations
C)a decrease in business taxes
D)an increase in nominal interest rates

Question

Quizplus · Accepted Answer

A decrease in business taxes would increase the after-tax profits businesses can earn from their investments, which would increase their incentive to invest and thus increase real planned investment demand. A decrease in new technologies available (A) would likely decrease planned investment, as would a decline in profit expectations (B). An increase in nominal interest rates (D) would make borrowing more expensive for firms and decrease the incentive to invest.

Which Would Increase Real Planned Investment Demand