Ikea To Invest More Than $3B In Stores

Ikea is investing about $3.2 billion in its physical locations to make them more adaptable to online orders. The company also announced that new stores in Stockholm and Toronto will open soon.—constructiondive.com

Some Data

In the first quarter of 2022, U.S. business investment increased from $2,906 billion to $2,969 billion.

Answer the following questions to check your understanding of the story.

Why is Ikea investing in existing stores and building new stores now?

a) Ikea expects its investment will return a positive net present value.

b) The nominal interest rate is low.

c) Ikea has generated sufficient revenue to pay for renovations and new stores.

d) Financial institutions want to lend the necessary funds in today’s economic climate.

What is the effect of the increase in U.S. business investment in the first quarter of 2022 on the real interest rate and private saving?

The real interest rate ______________ and private saving ______________.

a) falls; decreases

b) falls; increases

c) rises; decreases

d) rises; increases

Ikea To Invest More Than $3B In Stores

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