Figure 8-1

-Refer to Figure 8-1.Which of the following could shift the investment demand curve from ID₀ to ID₁?
A)the discovery of new, profitable investment opportunities
B)higher business taxes
C)inventories rising above desired levels
D)pessimistic sales and profit forecasts

Question

Figure 8-1
 
-Refer to Figure 8-1.Which of the following could shift the investment demand curve from ID₀ to ID₁?
A)the discovery of new, profitable investment opportunities 
B)higher business taxes 
C)inventories rising above desired levels 
D)pessimistic sales and profit forecasts

Quizplus · Accepted Answer

The discovery of new, profitable investment opportunities would increase the expected return on investment and shift the investment demand curve to the right from ID₀ to ID₁. Higher business taxes (B), inventories rising above desired levels (C), and pessimistic sales and profit forecasts (D) would decrease the expected return on investment and shift the investment demand curve to the left.

Figure 8-1 -Refer to Figure 8-1.Which of the Following Could Shift the Following