Refer to the information provided in Figure 15.1 below to answer the questions that follow. Figure 15.1
-Refer to Figure 15.1. Suppose the economy is currently at Point B. If investors are optimistic about future growth in aggregate output, investment
A) moves to Point C.
B) moves to Point A.
C) moves to Point D.
D) stays at Point B.

Question

Refer to the information provided in Figure 15.1 below to answer the questions that follow.  Figure 15.1
-Refer to Figure 15.1. Suppose the economy is currently at Point B. If investors are optimistic about future growth in aggregate output, investment
A) moves to Point C. 
B) moves to Point A. 
C) moves to Point D. 
D) stays at Point B.

Quizplus · Accepted Answer

If investors are optimistic about future growth in aggregate output, they will increase investment to take advantage of the potential income gains. This will shift the investment curve to the right, from I1 to I2, causing equilibrium to move from Point B to Point D. Therefore, the correct answer is C.

Refer to the Information Provided in Figure 15