Which of the following would increase the level of planned real investment?
A) An increase in the interest rate
B) An expectation of higher future profits
C) An expectation of higher future costs
D) An increase in business taxes

Question

Quizplus · Accepted Answer

An expectation of higher future profits would increase the level of planned real investment as businesses would be more willing to invest in new projects or expand existing ones if they anticipate higher returns in the future. Increases in interest rates, higher future costs, and business taxes all have the potential to decrease planned real investment as they increase the cost of borrowing and make it less profitable to invest.

Which of the Following Would Increase the Level of Planned