The Investment Demand Curve Suggests That

question 204

Multiple Choice

The investment demand curve suggests that

• A) changes in the real interest rate will not affect the amount invested.
• B) there is an inverse relationship between the real rate of interest and the level of investment spending.
• C) an increase in business taxes will tend to stimulate investment spending.
• D) there is a direct relationship between the real rate of interest and the level of investment spending.

---

Definitions:

Strategic Investments

Investments made to gain a competitive advantage or achieve long-term goals rather than for short-term profit.

Trading Investments

Trading investments are financial assets acquired with the intention of selling them for a short-term gain, often held by companies in financial sectors.

Statement Of Financial Position

A financial report that displays a company's assets, liabilities, and equity at a specific point in time.

Unrealized Gains

Increases in the value of assets that a company holds which are not realized through a sale transaction.