Which concept would you use to explain why investment spending did not grow strongly between 2011...

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Economics

Which concept would you use to explain why investmentspending did not grow strongly between 2011 and 2014 althoughinterest rates were very low? Think about what drives investmentspending and use a certain principle we covered in the chaptertitled [Income and Expenditure] ( Around150 words)

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Amid low interest rates and easily available capital market financing two major reasons have been given for the downturn of business investment The first refers to the perceived disparity between desirable financial circumstances and investment incentives In fact it may be that businesses with the best acquisition prospects do not have adequate internal funds or easy access to external funding A second more plausible explanation is that even if firms do have funds to invest they are too uncertain about future economic conditions and so whether the possible return on investment will justify its cost An inability to fund investment means companies have See Answer

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