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Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
- UGC NET
- Economics
Which of the following will cause the investment- demand curve to shift to the right? (a decrease in interest rate b) an increase in disposable income (c) a dec
Which of the following will cause the investment- demand curve to shift to the right? (A) decrease in interest rate( b) An increase in disposable income (c) A decrease in taxes (d) All of the above
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Thankyou ! I understood the concept but the Answer in the book is option B... Can you please help me out with this.
Rise in the disposable income can also affect investment but not directly. Let us see how. Rise in disposable income leads to the rise in consumption. The rise in demand for consumer goods would induce investment. In this way, a rise in disposable income can shift the investment damand curve. Hope you understood now.
Is there any doubt, now?
No ,Its clear now Thankyou !
Okay, You're Welcome.