Assume that investment is highly insensitive to the


Assume that investment is highly insensitive to the interest rate. Explain what the effects are on interest and income of an increase in government expenditure (G). Which component(s) of aggregate demand are crowded out (i.e., reduced)? Use an IS-LM diagram to support your answer.

Request for Solution File

Ask an Expert for Answer!!
Business Economics: Assume that investment is highly insensitive to the
Reference No:- TGS02185538

Expected delivery within 24 Hours