Describe the effects of price rise on capital investment.
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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.
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2
Answer:
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 on capital investment.
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