One of the primary determinants of planned real investment spending is the
A) firm expectation of future business profits.
B) rate of real consumption spending.
C) rate of real government spending.
D) rate of real saving.

Question

Quizplus · Accepted Answer

Planned real investment spending is primarily determined by the expectation of future business profits. Firms invest in new technologies, equipment, and infrastructure only when they anticipate a return on their investment in the form of increased profits in the future. Real consumption spending, government spending, and saving rates can also impact investment spending indirectly, but the primary driver of investment decisions is the expectation of future profits.

One of the Primary Determinants of Planned Real Investment Spending