Question

Which of the following are the two primary factors that affect investment spending?

A. Government policies and technological advancements
B. Interest rates and consumer confidence
C. Inflation and exchange rates
D. Economic growth and unemployment rates

Answer 1

The two primary factors that affect investment spending are interest rates and consumer confidence.

Step-by-step explanation:

The two primary factors that affect investment spending are interest rates and consumer confidence. Interest rates play a significant role in determining how much investment a firm will make. Lower interest rates stimulate investment spending, while higher interest rates reduce it. Meanwhile, consumer confidence, which is influenced by factors such as income, employment levels, and economic outlook, affects the willingness of individuals to spend and invest.