Why does investment spending go up and down so much?

Question

With your knowledge in economics, why does investment spending go up and down so much? Explain why investment spending is so volatile.

points for best answer!!

Answer 1

Investment spending can be timed unlike most consumption which varies little over  business cycles, so it depends more  on peoples perception about the future.  When the future looks risky they invest less and put their money in save instruments like government bonds, and they invest more when  the future looks bright, so investment spending can vary 20 or 30%.  Keynes referred to  it as Animal spirits driving  investment decisions, because it is not alway clear  why people see potential risk the way they do.