Panel(a)shows that business fixed investment increases when the interest rate falls. This is because a lower interest rate reduces the cost of capital and therefore makes owning capital more profitable. Panel(b)shows an outward shift in the investment function, which might be due to an increase in the marginal product of capital. Panel (a) shows that business fixed investment increases when the interest rate falls. This is because a lower interest rate reduces the cost of capital and therefore makes owning capital more profitable. Panel (b) shows an outward shift in the investment function, which might be due to an increase in the marginal product of capital