If business managers become more pessimistic about future sales and profits, 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

A decrease in optimism about future sales and profits will lead to a decrease in expected returns on investment, causing a downward shift in the autonomous investment function as businesses reduce their investment levels.

If Business Managers Become More Pessimistic About Future Sales and Profits