You are working for a major bank, forecasting investment. Consider what happens to investment in each of the following scenarios. Show the change graphically, using the investment line.

a. The economy is in a recession, and firms’ cash reserves are declining.

b. Congress passes the Tax Cuts and Jobs Act (TCJA), which lowers corporate income taxes.

c. The Federal Reserve decides to raise interest rates.

d. A new technology is discovered that increases the productive capacity of factories.