Question

A rightward shift of the investment demand curve will:

Answer 1

A rightward shift of the investment demand curve will suggest an increase in demand. The reasons for this shift in the right would depend on the situation of the economy. The shifting of the curve may be affected by the following: 

1. Level of economic activity 

The increase in production would increase the demand thus the curve will shift to the right. 

2. Expectations 

The forecasting would also affect the shifting of the curve since they may have forecasted an increase sale of the company 

3. Capacity utilization 

The larger the utilization of the capacity of the stocks, the larger would be the demand. 

4. Cost of capital goods 

The cost of constructing or producing capital would also affect the investment demand since investors would always look at the potential returns.