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:

Expected Utility

A concept in economics that calculates the utility expected from an investment, considering all possible outcomes.

Standard Deviation

A measure of the dispersion of a set of data from its mean, indicating how spread out the values in a data set are.

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, marking preferences of equal utility.

Risk-Averse

A characteristic describing an investor or decision-maker who prioritizes avoiding loss over making a gain, typically favoring safer investments.