Favorable expectations about future sales will cause higher investment,ceteris paribus.
Businesses will be more inclined to invest when it seems likely to pay off financially.

Question

Quizplus · Accepted Answer

Favorable expectations about future sales suggest that investing in the business will be profitable, which is likely to cause higher levels of investment. This is consistent with the basic principles of finance, which suggest that businesses are rational and will pursue investments that are likely to generate higher returns.

Favorable Expectations About Future Sales Will Cause Higher Investment,ceteris Paribus