nheducation.com/flow/connect.html 10 Homework Saved Help Save & E Refer to the table below and suppose that the real interest rate is 6 percent. Next, assume that some factor changes such that the expected rate of return declines by 2 percentage points at each prospective level of investment. Cumulative Amount of Investment Having This Rate of Return or Higher (Billions per Year) Real Interest Rate (i) and Expected Rate of Return (r) 16% $0 14 5 12 10 10 15 20 25 30 4 35 2 40 0 Instructions: Enter your answer as a whole number a. Assuming no change in the real interest rate, by how much and in what direction will investment change? Next 12 of 16 12 of 16 Prev Я O e to search
nheducation.com/flow/connect.html 10 Homework Saved Help Save & E Refer to the table below and suppose that the real interest rate is 6 percent. Next, assume that some factor changes such that the expected rate of return declines by 2 percentage points at each prospective level of investment. Cumulative Amount of Investment Having This Rate of Return or Higher (Billions per Year) Real Interest Rate (i) and Expected Rate of Return (r) 16% $0 14 5 12 10 10 15 20 25 30 4 35 2 40 0 Instructions: Enter your answer as a whole number a. Assuming no change in the real interest rate, by how much and in what direction will investment change? Next 12 of 16 12 of 16 Prev Я O e to search
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Refer to the table below and suppose that the real interest rate is 6 percent. Next, assume that some factor changes such that the
expected rate of return declines by 2 percentage points at each prospective level of investment.
Cumulative Amount of
Investment Having This
Rate of Return or Higher
(Billions per Year)
Real Interest Rate (i) and
Expected Rate of Return (r)
16%
$0
14
5
12
10
10
15
20
25
30
4
35
2
40
0
Instructions: Enter your answer as a whole number
a. Assuming no change in the real interest rate, by how much and in what direction will investment change?
Next
12 of 16
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12
Instructions: Enter your answer as a whole number
a. Assuming no change in the real interest rate, by how much and in what direction will investment change?
Investment will (Click to select)
by:
Book
billion.
Print
rences
The investment schedule will shift to the (Click to select)
b.Which of the following might cause this change?
O A decision to increase inventories
O An increase in excess production capacity
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