Which of the following will cause an inward shift of the investment function?
A) innovation that improves production efficiency at every level of output
B) an increase in business taxes
C) business people becoming optimistic about the future
D) a decrease in the interest rate

Question

Quizplus · Accepted Answer

An increase in business taxes will increase the cost of investment and decrease the expected rate of return, leading to a decrease in investment and an inward shift in the investment function.

Which of the Following Will Cause an Inward Shift of the Investment