At a given interest rate, the investment function shows
A) how many funds people will invest in the stock market.
B) how many funds people will earn on their stock market investments.
C) how profitable it will be for firms to expand.
D) how much businesses will spend on the capital stock.

Question

Quizplus · Accepted Answer

The investment function shows how much businesses will spend on the capital stock, such as machinery, equipment, and buildings, at a given interest rate. This spending is known as investment because it represents an increase in the capital stock, which can lead to increased productivity and economic growth. The other choices listed are not related to the investment function.

At a Given Interest Rate, the Investment Function Shows