Technological progress should lead to
A) a rightward shift in the investment function.
B) a downward movement along the investment function.
C) an unchanged investment function.
D) less saving.

Question

Quizplus · Accepted Answer

Technological progress is a factor that can increase the profitability of investment, and therefore leads to a rightward shift in the investment function. This is because it makes investment more attractive at every level of the interest rate, generating a higher level of investment across all interest rate levels.

Technological Progress Should Lead to