INDUCED INVESTMENT: Business investment expenditures that depend on income or production (especially national income and gross domestic product). Such investments are generally made by the private companies when they see a gap between the demand and supply and make profits out of such venture. Such investment is governed by the income and the amount of profit a firm can generate. In a free-enterprise capitalist economy, investment arc induced by profit-motive. It tells us how the investors or producers respond to a change in income or in the interest rate over a given time propensity to invest together with propensity to consume determine the level of income. Induced investment b. The investment schedule is the function of entrepreneurial behavior. In case the existing stock of machines is working to its full capacity, an increase in the demand for goods manufac­tured by them will raise the demand for capital goods of this type and raise the inducement to invest. Ans: No, because of MEI