Answer:
Thr correct answer is b. high.
Explanation:
New investment is usually put into an economy when profit expectations are high.
The rate of economic growth (means profit opportunity) affects the level of investment. Business investment tends to be quite volatile. If businesses see an improvement in economic forecasts, they will increase investment to meet future demand. Therefore, an improvement in the rate of economic growth can cause a substantial rise in investment. But, if there is an economic downturn and a fall in the rate of economic growth, business will cut back on investment.
However, in addition, to the profit expectations, the level of investment also depends on the rate of interest, business confidence, technological progress and, government regulations and policies .
