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It is important to remember that some inventory changes are planned, while others are unplanned. Since the investment demand curve deals only with planned investment,
It is important to remember that some inventory changes are planned, while others are unplanned. Since the investment demand curve deals only with planned investment, it is only affected by planned changes that firms desire to make to their inventory levels. In this case:
a If firms are planning to increase their inventories, the investment demand curve shifts to the left.
b Firms make planned changes to their inventory levels mostly because they are expecting either faster or slower sales.
c None of the answers is correct
d Inventory never changes through investment.
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