The negative relationship between the demand for investment goods and the real interest rate is determined by the fact that more investment reduces the future depreciation. more investment reduces the marginal product of future capital. more investment increases the total supply for current goods. more investment increases the total demand for current goods. None of the other answers is correct.
The negative relationship between the demand for investment goods and the real interest rate is determined by the fact that more investment reduces the future depreciation. more investment reduces the marginal product of future capital. more investment increases the total supply for current goods. more investment increases the total demand for current goods. None of the other answers is correct.
Chapter8: The Keynesian Model
Section: Chapter Questions
Problem 19SQ
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