If businesses feel more optimistic about the state of the economy, then this change is likely to:
A) Cause a movement up the investment demand curve
B) Cause a movement down the investment demand curve
C) Shift the investment demand curve to the left
D) Shift the investment demand curve to the right

Question

Quizplus · Accepted Answer

When businesses feel more optimistic about the state of the economy, they are more likely to invest in new projects and expand their operations. This increase in investment demand will cause a rightward shift in the investment demand curve, as businesses demand more investment at every interest rate level.

If Businesses Feel More Optimistic About the State of the Economy