Explain how a decrease in the interest rate will affect investment.

Explain how a decrease in the interest rate will affect investment.

Question

1) Explain how a decrease in the interest rate will affect investment.

2) Considering the spending multiplier affect, assume the MPC is 0.90. If autonomous investment increased by $500 billion, what would be the impact on real GDP?

Explain how a decrease in the interest rate will affect investment.


 

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