What is investment spending, and what are the factors that impact investment demand? Explain.
What will be an ideal response?
Investment is expenditures on new plants, equipment, and structures, plus changes in inventories. Demand for investment is determined by several factors. Ceteris paribus, a change in interest rates causes a movement along the investment demand curve. A change in expectations (particularly expectations of future sales) or a technology or innovation change or an unexpected depreciation, such as from a fire, causes a shift of the investment demand curve.
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If a market is shared equally by 100 firms, the Herfindahl-Hirschman Index is
A) 1/100. B) 1/50. C) 50. D) 100.
Patents stimulate technological advance by
A. enabling the government to determine which potential technological advances firms should pursue. B. making capital more productive. C. allowing inventors to capture the economic rewards of their inventions. D. providing information about the status of technical knowledge in the economy.
A monopoly that price discriminates ______
A. benefits buyers because it offers the good at a variety of prices B. gains because it converts consumer surplus to economic profit C. uses resources more efficiently than would a competitive market D. enables buyers to maximize their consumer surplus
The legal transfer of chattels supports economic growth
Indicate whether the statement is true or false