The difference between investment schedule and investment demand curve.

Question

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Answer 1

Question

Chapter 11, Problem 1DQ

To determine

The difference between investment schedule and investment demand curve.

Expert Solution & Answer

Explanation of Solution

An investment schedule depicts the levels of investment made at different levels of gross domestic product (GDP). If the level of national income is higher, then the level of investment would be high and vice versa. It shows that there is a positive relationship which exists among GDP or the national income and investment.

Whereas, the investment demand curve shows the level of investment made at different levels of interest rate and expected return. If the expected return from the investment is greater, then the level of investment is higher and vice versa. Thus, there is a positive relationship between the investment demand and expected return.

If the interest rate is higher, then the cost of borrowing would be greater which in turn reduces the return from the investment. Thus, increasing interest leads to reduce the demand for investment and vice versa. There is a negative relationship exist among the demand for investment and interest rate.

Economics Concept Introduction

Concept Introduction:

Investment schedule: An investment schedule shows the level of demand for investment at different levels of national income.

Investment demand curve: The investment demand curve depicts the value of investment projects demanded at every given interest rate.

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Answer 2

Question

Chapter 11, Problem 1DQ

To determine

The difference between investment schedule and investment demand curve.

Expert Solution & Answer

Explanation of Solution

An investment schedule depicts the levels of investment made at different levels of gross domestic product (GDP). If the level of national income is higher, then the level of investment would be high and vice versa. It shows that there is a positive relationship which exists among GDP or the national income and investment.

Whereas, the investment demand curve shows the level of investment made at different levels of interest rate and expected return. If the expected return from the investment is greater, then the level of investment is higher and vice versa. Thus, there is a positive relationship between the investment demand and expected return.

If the interest rate is higher, then the cost of borrowing would be greater which in turn reduces the return from the investment. Thus, increasing interest leads to reduce the demand for investment and vice versa. There is a negative relationship exist among the demand for investment and interest rate.

Economics Concept Introduction

Concept Introduction:

Investment schedule: An investment schedule shows the level of demand for investment at different levels of national income.

Investment demand curve: The investment demand curve depicts the value of investment projects demanded at every given interest rate.

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Answer 3

Question

Chapter 11, Problem 1DQ

To determine

The difference between investment schedule and investment demand curve.

Expert Solution & Answer

Explanation of Solution

An investment schedule depicts the levels of investment made at different levels of gross domestic product (GDP). If the level of national income is higher, then the level of investment would be high and vice versa. It shows that there is a positive relationship which exists among GDP or the national income and investment.

Whereas, the investment demand curve shows the level of investment made at different levels of interest rate and expected return. If the expected return from the investment is greater, then the level of investment is higher and vice versa. Thus, there is a positive relationship between the investment demand and expected return.

If the interest rate is higher, then the cost of borrowing would be greater which in turn reduces the return from the investment. Thus, increasing interest leads to reduce the demand for investment and vice versa. There is a negative relationship exist among the demand for investment and interest rate.

Economics Concept Introduction

Concept Introduction:

Investment schedule: An investment schedule shows the level of demand for investment at different levels of national income.

Investment demand curve: The investment demand curve depicts the value of investment projects demanded at every given interest rate.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 11, Problem 1DQ

To determine

The difference between investment schedule and investment demand curve.

Expert Solution & Answer

Explanation of Solution

An investment schedule depicts the levels of investment made at different levels of gross domestic product (GDP). If the level of national income is higher, then the level of investment would be high and vice versa. It shows that there is a positive relationship which exists among GDP or the national income and investment.

Whereas, the investment demand curve shows the level of investment made at different levels of interest rate and expected return. If the expected return from the investment is greater, then the level of investment is higher and vice versa. Thus, there is a positive relationship between the investment demand and expected return.

If the interest rate is higher, then the cost of borrowing would be greater which in turn reduces the return from the investment. Thus, increasing interest leads to reduce the demand for investment and vice versa. There is a negative relationship exist among the demand for investment and interest rate.

Economics Concept Introduction

Concept Introduction:

Investment schedule: An investment schedule shows the level of demand for investment at different levels of national income.

Investment demand curve: The investment demand curve depicts the value of investment projects demanded at every given interest rate.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1DQ

To determine

The difference between investment schedule and investment demand curve.

Expert Solution & Answer

Explanation of Solution

An investment schedule depicts the levels of investment made at different levels of gross domestic product (GDP). If the level of national income is higher, then the level of investment would be high and vice versa. It shows that there is a positive relationship which exists among GDP or the national income and investment.

Whereas, the investment demand curve shows the level of investment made at different levels of interest rate and expected return. If the expected return from the investment is greater, then the level of investment is higher and vice versa. Thus, there is a positive relationship between the investment demand and expected return.

If the interest rate is higher, then the cost of borrowing would be greater which in turn reduces the return from the investment. Thus, increasing interest leads to reduce the demand for investment and vice versa. There is a negative relationship exist among the demand for investment and interest rate.

Economics Concept Introduction

Concept Introduction:

Investment schedule: An investment schedule shows the level of demand for investment at different levels of national income.

Investment demand curve: The investment demand curve depicts the value of investment projects demanded at every given interest rate.

Answer 6

Chapter 11, Problem 1DQ

To determine

The difference between investment schedule and investment demand curve.

Expert Solution & Answer

Explanation of Solution

An investment schedule depicts the levels of investment made at different levels of gross domestic product (GDP). If the level of national income is higher, then the level of investment would be high and vice versa. It shows that there is a positive relationship which exists among GDP or the national income and investment.

Whereas, the investment demand curve shows the level of investment made at different levels of interest rate and expected return. If the expected return from the investment is greater, then the level of investment is higher and vice versa. Thus, there is a positive relationship between the investment demand and expected return.

If the interest rate is higher, then the cost of borrowing would be greater which in turn reduces the return from the investment. Thus, increasing interest leads to reduce the demand for investment and vice versa. There is a negative relationship exist among the demand for investment and interest rate.

Economics Concept Introduction

Concept Introduction:

Investment schedule: An investment schedule shows the level of demand for investment at different levels of national income.

Investment demand curve: The investment demand curve depicts the value of investment projects demanded at every given interest rate.

Answer 7

Chapter 11, Problem 1DQ

To determine

The difference between investment schedule and investment demand curve.

Answer 8

Expert Solution & Answer

Explanation of Solution

An investment schedule depicts the levels of investment made at different levels of gross domestic product (GDP). If the level of national income is higher, then the level of investment would be high and vice versa. It shows that there is a positive relationship which exists among GDP or the national income and investment.

Whereas, the investment demand curve shows the level of investment made at different levels of interest rate and expected return. If the expected return from the investment is greater, then the level of investment is higher and vice versa. Thus, there is a positive relationship between the investment demand and expected return.

If the interest rate is higher, then the cost of borrowing would be greater which in turn reduces the return from the investment. Thus, increasing interest leads to reduce the demand for investment and vice versa. There is a negative relationship exist among the demand for investment and interest rate.