The Investment Demand Function Would Shift for All of the Following

question 63

Multiple Choice

The investment demand function would shift for all of the following reasons except:

• A) an improvement in technology raises the marginal product of capital.
• B) an increase in population raises the demand for housing.
• C) an increase in government spending raises the real interest rate.
• D) the investment tax credit is reinstated.

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Definitions:

Firms

Business organizations or entities engaged in commercial, industrial, or professional activities, aiming to generate profits through the provision of goods or services.

Workers

Individuals engaged in any form of economic activity to earn wages or salary.

Market Wage

The prevailing rate of pay for work in a particular field or occupation in the competitive market.

Profit Maximizing

The process of increasing the difference between total revenue and total cost to achieve the highest possible profit.