ID graph quiz Flashcards
1
Q
how do businesses determine amount of investment taken
A
compare expected rate of return to interest cost
expected return>interest cost, then invest
expected return<interest cost, then don’t invest
2
Q
shifts in investment demand
A
cost of production
Buisness taxes
technological change
stock of capital
expectations
3
Q
what only moves along line
A
interest rate change
4
Q
cost of production shifts
A
low cost (right)
high cost (left)
5
Q
Buisness tax shifts
A
low tax (right)
high tax (left)
6
Q
technology change shift
A
new tech (right)
lack of change of tech (left)
7
Q
stock of capital shift
A
low capital (right)
high capital (left)
8
Q
expectations shift
A
positive (right)
negative (left)
