Correct Option: B

Investment expenditure refers to the creation of new assets i.e. an addition to the stock of existing capital assets. According to Keynes investment demand depends upon two factors: (a) Expected rate of profit which he calls as Marginal Efficiency of Capital (MEC). Investment demand increases with the increase in the expected rate of profit; (b) the rate of interest (IR). Investment demand decreases with the increase in the rate of interest.