If business managers become more optimistic about future sales and profits, then there will be
A)a rightward movement along the autonomous investment function
B)a leftward movement along the autonomous investment function
C)an upward shift of the autonomous investment function
D)a downward shift of the autonomous investment function
E)no movement along or shift of the autonomous investment function

Question

Quizplus · Accepted Answer

An upward shift of the autonomous investment function would occur if business managers become more optimistic about future sales and profits. This is because an increase in optimism would lead to an increase in investment spending, which would shift the investment function upward.

If Business Managers Become More Optimistic About Future Sales and Profits