Question

Describe the effects of price rise on capital investment.​

Answer 1

Explanation:

if there is spare capacity in the economy and increase in investment could cause knock on effect throughout the economy. the initial increase in investment causes a rise in output and so people can gain more income which is then spent causing a for the rise in AD.

Answer 2

Explanation:

if there is spare capacity in the economy and increase in investment could cause knock on effect throughout the economy. the initial increase in investment causes a rise in output and so people can gain more income which is then spent causing a for the rise in AD