If firms are more optimistic that future profits will rise and remain strong for the next few years, then
A)planned investment spending will fall.
B)planned investment spending will rise.
C)unplanned investment spending will remain unaffected.
D)planned investment spending will rise and then fall.
E)unplanned investment will rise.

Question

Quizplus · Accepted Answer

If firms are more optimistic about future profits, they will be more willing to invest in expanding their business operations and increasing production capacity. This will lead to an increase in planned investment spending.

If Firms Are More Optimistic That Future Profits Will Rise