The investment–demand curve will shift to the right as the result of

Question

Multiple Choice
the availability of excess production capacity.
an increase in business taxes.
businesses becoming more optimistic about future business conditions.
an increase in the real interest rate.

Answer 1

The correct answer is:

businesses becoming more optimistic about future business conditions.

When businesses are more optimistic about future conditions, they are more likely to invest in new projects and capital, shifting the investment-demand curve to the right. The other options would generally not lead to an increase in demand for investment.