(Consider This)During the Great Recession of 2007-2009,both real interest rates and investment spending declined.This suggests that:
A) the investment demand curve was positively sloped during this period.
B) purchases of capital from abroad increased,and these were not reflected in investment spending figures for that period.
C) firms were optimistic about future sales.
D) the investment demand curve shifted inward.

Question

Quizplus · Accepted Answer

The fact that both real interest rates and investment spending declined during the Great Recession suggests that the investment demand curve shifted inward. This means that firms were less willing to invest in new capital projects at a given interest rate. The other options do not necessarily follow from the given information.

(Consider This)During the Great Recession of 2007-2009,both Real Interest Rates