Investment spending is:
A) generally countercyclical.
B) generally procyclical.
C) unrelated to the business cycle.
D) generally procyclical for some components and generally countercyclical for others.

Question

Quizplus · Accepted Answer

Investment spending is generally procyclical, meaning that it tends to increase during economic expansions and decrease during economic contractions. This is because businesses are more likely to invest in new equipment, structures, and technology when they expect higher future profits, which is more likely during economic expansions.

Investment Spending Is