Which of the following factors would decrease investment demand?
A) A decrease in business taxes
B) An increase in the cost of acquiring capital goods
C) An increase in the rate of technological change
D) A decrease in the stock of capital goods on hand

Question

Quizplus · Accepted Answer

An increase in the cost of acquiring capital goods would decrease investment demand because it becomes more expensive for businesses to invest in new capital goods, which would reduce the quantity of investment demanded at any given interest rate. The other options would either increase investment demand (A and C) or have no effect on investment demand (D).

Which of the Following Factors Would Decrease Investment Demand