Between the Spring of 1990 and the Spring of 1991

Essay

Between the spring of 1990 and the spring of 1991, interest rates in the United States dropped nearly two full percentage points, but this did not have much of an effect on investment spending plans. Explain how this could happen. Draw a graph of the investment demand schedule that would represent this situation. During this time period would an expansionary monetary policy have been an effective way to stimulate the economy? Explain.