A Rightward Shift of the Investment Demand Curve Could Be

question 154

Multiple Choice

A rightward shift of the investment demand curve could be caused by:

• A)a technological advance.
• B)optimism about long-term growth.
• C)forecasts of favorable business conditions.
• D)an increase in confidence in short-run economic conditions.
• E)any of these.

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Definitions:

Behavioral Economics

An area within economics that examines how psychological, cognitive, emotional, cultural, and social aspects influence the economic choices made by individuals and institutions.

System 1

A term from psychology, referring to the fast, automatic, and often subconscious way of thinking, as opposed to the slower, more deliberate thought processes of System 2.

System 2

A term often used in behavioral economics, referring to slow, deliberative, and analytical thinking, contrasted with fast, instinctive, and emotional 'System 1' thinking.

Neoclassical Assumption

Underlying principles of neoclassical economics that include rationality, individuals maximizing utility, firms maximizing profits, and markets tending toward equilibrium.