The investment function would shift inward to the left if
A)real disposable income decreased.
B)interest rates increased.
C)there was an increase in business taxes.
D)there was a positive change in productive technology.

Question

Quizplus · Accepted Answer

An increase in business taxes would decrease the after-tax return on investment, making it less desirable for businesses to invest. As a result, the investment function would shift inward to the left. Real disposable income, interest rates, and productive technology would affect the level of investment, but not the direction of the shift in the investment function.

The Investment Function Would Shift Inward to the Left If