A country's government passes new legislation that provides significant tax credits for businesses that purchase new machinery and equipment. Assuming this policy makes firms more optimistic about the returns on potential projects, what is the most likely effect on the schedule that relates the quantity of planned investment to the interest rate?

Impact of Technological Advancement on Investment

Which of the following events would cause a shift of the entire investment function, as opposed to a movement along the function?

A decrease in the market interest rate will cause the investment function to shift to the right, indicating a higher level of planned investment at all possible interest rates.

Match each economic event with its most likely effect on the investment function, which shows the relationship between the interest rate and the quantity of planned investment.