All of the following will shift the investment curve except
A)Innovation.
B)Improvements in available technology.
C)Changes to expectations.
D)Changes to the interest rate.

Question

Quizplus · Accepted Answer

The interest rate affects the cost of borrowing, and thus affects the opportunity cost of investing. Therefore, changes to the interest rate will cause a movement along the investment curve, not a shift in the curve itself. Innovation, improvements in technology, and changes to expectations can all lead to new investment opportunities or alter the perceived risk and return of existing opportunities, causing a shift in the investment curve.

All of the Following Will Shift the Investment Curve Except