Which of the following will NOT decrease the investment demand curve?
A)business inventories that have risen far above desired levels
B)business expectations of lower future sales and profits
C)an increase in real interest rates
D)higher business taxes

Question

Quizplus · Accepted Answer

An increase in real interest rates will increase the cost of borrowing and therefore decrease investment demand, shifting the curve to the left. Business inventories that have risen far above desired levels (A), business expectations of lower future sales and profits (B), and higher business taxes (D) will all decrease the expected return on investment and hence decrease investment demand, shifting the curve to the left.

Which of the Following Will NOT Decrease the Investment Demand