8. Profits Profits gained from the previous year will influence investment. Some investments are financed through borrowed funds, although much of the investment is financed by the firm from the previous years profit. A higher profit will provide a larger amount of investment for the firm. Thus, the firm will need to increase its investment if its profit is high. - > V Y When investment increase, the curve will shift upward, when investment decrease, the curve will shift downward. The curve shift upward from I, to I, The curbe shift downward from I, to 12