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

Multiple Choice
an increase in the excess production capacity available in industry.
a decrease in business taxes.
increased business optimism with respect to future economic conditions.

1 answer

The investment–demand curve will shift to the left as a result of:

an increase in the excess production capacity available in industry.

An increase in excess production capacity means that firms already have the ability to produce more goods without needing to invest in new capital, which reduces the incentive to invest further. The other options (a decrease in business taxes and increased business optimism) would typically lead to a rightward shift in the investment-demand curve.