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Location: Macroeconomics Unit III - The Financial Sector
Discussion: Does investment Demand curve shift in and out?
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Charlie.Gao |
Does investment Demand curve shift in and out?
Mar 17 2008, 11:50 AM EDT
Okay, so we all know that Supply and Demand curves in Microeconomics can shift left and right, in and out. Same goes with the Aggregate Supply and Demand curves in Macro. But what about the Investment Demand curve? Are there any determinants that shift the curve? Or is it limited to movements along the curve itself
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alicesu |
1. RE: Does investment Demand curve shift in and out?
Mar 17 2008, 1:16 PM EDT
Charlie what did you mean by the investment Demand curve? Since investment is one of the determinants of aggregate demand, I would assume that you're referring to the aggregate demand curve, and yes, it does shift in and out. This is because there are certain factors that will not just work to increase/decrease the quantity of money invested, but will actually shift the entire curve out/in.
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mrdaily |
2. RE: Does investment Demand curve shift in and out?
Mar 18 2008, 6:56 AM EDT
Well, there is an least one determinant for shifting investment demand- either increasing or decreasing investments. The investment demand curve is composed of investment demand (on the x-axis) and expected rate of return in addition to the real interest rate (on the y-axis). Movement along the curve is done by a change in quantity of investment demanded but an actual shift in the ID curve is determined by changes in both expected rate of return and investment.
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MondGu |
3. RE: Does investment Demand curve shift in and out?
Mar 18 2008, 8:49 AM EDT
Factors that shifts the investment demand include: acquisition, maintenance, and operating costs+business taxes+technological change+stocks of capital goods on hand+expectations. It is not limited to movements along the curve itself.
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kevinhuang |
4. RE: Does investment Demand curve shift in and out?
Mar 18 2008, 9:01 AM EDT
Movement for the investment demand curve is not limited to movements along the curve itself because as Mond has mentioned, there are many factors that shift invesment demand curve in and out. In fact I think none of the curves in Econ do not have the ability to shift in and out.
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jenniferchoi |
5. RE: Does investment Demand curve shift in and out?
Mar 18 2008, 6:07 PM EDT
Investment demand curve can be shifted in and out, right and left by changes in operating costs, business taxes, technological advance, expectations and so on. They are called the determinants of the investment demand cuve, and it is not limited to movements along the curve itself,
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emilyyeh |
6. RE: Does investment Demand curve shift in and out?
Mar 19 2008, 11:04 AM EDT
This post is for Cassy Chang: People usually invest more when they are optimistic about what they are investing in. So investment demand is not solely dependent on the money supply, but also people’s expectations. 0 out of 3 found this valuable. Do you? |
jlau21 |
7. RE: Does investment Demand curve shift in and out?
Mar 20 2008, 7:59 AM EDT
I'm sure there are determinants that shift the investment demand curve, just like every other curve we have learned about so far. Like Jennifer mentioned, some of these might include changes in operating costs, business taxes, technological advance, and expectations .
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