Answer to Question #135646 in Macroeconomics for Bongelwa Dlomo

Question

A leftward shit on investment curve Is caused by?

Answer 1

solution

investment curve will shift when rate of interest remain constant

if business taxes will increase than producer will prefer invest less without change in interest rate so investment will fall at given cost of capital , this will cause leftward shift of investment curve.

if government taxes will increase than investment curve will shift leftward .