Assignment 1: Explain the role of sensitiveness of investment to any given change in the rate of interest (b) on the size of Fiscal Policy Multiplier with the help of a diagram. Explain the economics behind it in detail.
Answers
Answered by
0
Answer:
How do changes in the rate of interest influence the decision of investment?
An explanation of how the rate of interest influences the level of investment in the economy. Typically, higher interest rates reduce investment, because higher rates increase the cost of borrowing and require investment to have a higher rate of return to be profitable.
Similar questions