Answered: Interest rate, r (%) Planned investment…

Business

Economics

Interest rate, r (%) Planned investment 10+ ☑

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: The Basic Tools Of Finance

Section: Chapter Questions

Problem 1CQQ

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Question

Some economists argue that the "animal spirits" of investors are so important in determining the level of investment in the economy that interest rates do not matter at all.

Part 2

a. Suppose that this were

truelong dash—that

investment in no way depends on interest rates.

Using the line drawing tool, show what the investment curve would look like. Label the line 'I'.

is my answer correct?

Interest rate, r (%)
Planned investment
10+
☑

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