Suppose investment demand rises in an autarky. Which of the following statements or graphs correctly indicate the long-run economic impact according to the classical model when consumption depends only on disposable income? Note: This is a multiple-answer question; thus, more than one option may be correct. a. The real interest rate rises. b. S₁ r 1₁ 12 1₁ 12 \I(r) I, S

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Suppose investment demand rises in an autarky. Which of the following statements or graphs correctly indicate the
long-run economic impact according to the classical model when consumption depends only on disposable
income?
Note: This is a multiple-answer question; thus, more than one option may be correct.
a. The real interest rate rises.
b.
r
r1
12
►
S₁ S₂
I(r)
1₁ 1₂
c. Investment expenditure remains unchanged.
d. National saving remains unchanged.
I,S
Transcribed Image Text:Suppose investment demand rises in an autarky. Which of the following statements or graphs correctly indicate the long-run economic impact according to the classical model when consumption depends only on disposable income? Note: This is a multiple-answer question; thus, more than one option may be correct. a. The real interest rate rises. b. r r1 12 ► S₁ S₂ I(r) 1₁ 1₂ c. Investment expenditure remains unchanged. d. National saving remains unchanged. I,S
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