Essay
Scenario 1
Assume that the investment demand function is represented by the following algebraic function: I = $300 - 2000r where $300 represents autonomous investment and "r" represents the interest rate.
-Using Scenario 1 calculate how high the interest rate would have to rise to drive planned investment to zero. Calculate the amount of investment that would take place at an interest rate of zero.
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Setting the investment equation to zero ...View Answer
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