Answer to Question #310736 in Macroeconomics for Precious

Question

All of the following will shift the investment demand curve to the right

EXCEPT

A. A decrease in the corporate income taxes

B. An increase in the productivity of new capital

C. An increase in real interest rates

D. An increase in corporate profits

Answer 1

The correct answer is;

C. An increase in real interest rates

Since increases in interest rates tend to discourage investment, the is because investment has a higher opportunity cost.