What is the relationship; remember how economist talk about relationships, between the level of investment and the interest rate? Which is the independent variable? What is the most intuitive way for you to remember this?

Q: Define the term Net Investment?

A: Investment: In economics, the term investment refers to the purchase of commodities that will be…

Q: Explain the difference between a flow variable and a stock variable. Classify each of the following…

A: Flow Variable -  Flow variables are the variables which measure over a period of time means . We can…

Q: Suppose a handbill publisher can buy a new duplicating machine for $ 500  and the duplicator has a…

A: In the question, the handbill publisher can buy a new duplicating machine that would help to cost to…

Q: How does a decrease in the tax rate on income earned on saving affect saving, investment, the…

A: In an economy, government taxes will have a significant impact on households consumption and savings…

Q: Looking at business fixed investment, elaborate on why investment is negatively related to the…

A: Investments are negatively related rate of interest.

Q: What does the net investment test indicate?

A: Net investment is the net amount of money a business spends on capital assets, minus the…

Q: Define and explain the internal rate of return on a new investment?

A: Internal rate of return or IRR is a measure in economics of  capital budgeting parlance and…

Q: What are the major economic functions of the interest rate? How might the fact that many businesses…

A: Answer - Major economic functions of the interest rate :- The interest rate has many economic…

Q: Q. 18 Dave deposits $2000 into the bank as deposits in 2016. The bank promises him a nominal…

A: Deposited - $2000 Nominal Interest rate = 5% = 0.05 Goods: 2 can of Coca-Cola 5 hamburgers

Q: Long run real interest rates are expected to increase. How will an accountant and economist view the…

A: An interest rate that has been modified to take inflation into consideration is known as a real…

Q: The IS relation means that the output increase leads to an interest rate decrease. TRUE or FALSE?…

A: IS curve denotes the relationship between interest rate and output level in the economy.

Q: B. Explain the following functions , and establish the independent variable for the function I=f(r)&…

A: A function can be termed as a binary relationship between two sets of variables such that the…

Q: government spending

A: 11.   Private Saving: if the private saving of the people increases the consumer will able to…

Q: Suppose that the interest rate is 4 percent. What is the future value of $100 four years from now?…

A: Interest rate = 4%Principal amount = $100

Q: he eco

A: Government expenditure or spending tends to includes all investment, government consumption and also…

Q: The following table contains data on the relationship between saving and income. Rearrange these…

A: Savings represent that part of a consumer’s income which is not used for consumption and is not paid…

Q: What is Capital expenditure?

A: Capital expenditure refers to expenditure made by the firms in tangible assets such as land,…

Q: Use the two-period model from the Appendix to answer this question. Your current income is 30,000.…

A: Current period income (Y1) = 30000 Current period expenditure (C1) = 24000 next period income (Y2) =…

Q: What is national saving? What is privet saving ?what is public saving? How are these three variables…

A: National savings is given by the equation = National Income - Consumption - Government expenditure.…

Q: What are the different types of investmen

A: Investment is the new expenditure on physical assets such as machines, buildings, tools and…

Q: If there is a rise in the real interest rate, how does the quantity of loanable funds demanded…

A: In the loanable funds market, loanable funds are demanded by the firms or businesses because it is…

Q: Discuss the overall purpose people have for investing. Define investment

A: Investment: Investment is the commitment of funds for some specific period of time, in return will…

Q: 5. Explain the difference between investment as the term is used by most people and investment as…

A: Investment- Investment means to invest the money in productive and non productive activities to…

Q: Describe the Investment Decision for a Simple Investment?

A: A simple investment can be made on the basis of various methods like the payback period, return on…

Q: What is the break even investment

A: The relationship that exists between fixed costs, variable costs, and returns can be studied by…

Q: all else equal, what does a lower interest rate mean for firms? what does a lower interest rate…

A: Interest rate positively related with the savings and negatively related with the investment. When…

Q: Financial institutions have warned that increased life expectancy means that many people have not…

A: Consumption  Consumption is the way that households consume products and services. Contrary to…

Q: An increase in interest rate always lowers the net interest income (NII) of a bank. Is this…

A: Net interest income (NII) refers to income earned by the banks that is determined by the difference…

Q: Suppose the economy moves into recession and there is general pessimism about the future economic…

A: A Fall in the GDP for consecutive two quarter is known as the recession. The aggregate demand…

Q: Define the term Return on Investment?

A: Return on investment measures the performance which is used to evaluate the efficiency of an…

Q: On the following graph, use the orange points (square symbol) to plot the nominal interest rates for…

A: The real interest rate for 2014 can be calculated as follows: Thus the value of 2014 real interest…

Q: Explain/Discuss Three ways that a reduced rate of interest influences real capital investment.

A: Real capital investment is the sum of money which is given to a company to achieve it business…

Q: Who benefits from an increase in interest rates? O people who are borrowing money O no one O people…

A: Interest rate: The interest rate is the rate or the proportion of an amount the lender or bank…

Q: The importance of income in determining savings has persisted since the time of Keynes. Why have…

A: Keynes: It refers to the economic theory under which economy's total spending and its effect are…

Q: an increase in the expected real interest rate tends to raise desired saving, but lower desired…

A: The change in the expected real interest rate affects the level of saving and investment in the…

Q: Describe the simple investment?

A: Investment refers to buying financial assets like shares and bonds to earn interest rates. Rate of…

Q: Assume that the economy is described by the following equations: Y=C+l+G, Y=8490, G-2719, T=2056,…

A: We have been given in the question that:- Y=8490 G=2719 T=2056 C=258+1/2(Y-T) I=400+40r Please find…

Q: Explain why an increase in the interest rate reduces the amount of residential investment

A: Interest rates impact the level the residential investment.

Q: To the nearest 0.01, what is the present value of each of the following income streams (expressed in…

A: The difference between the current value of cash inflows and withdrawals over some time is known as…

Q: Suppose consumption in year 2 (C2) is on the horizontal axis and consumption in year 1 (C1) is on…

A: In economics, the intertemporal problem explains how a consumer make choice between the present and…