Assignment: The Investment Demand Curve
In what direction will each of the following occurrences shift the investment demand curve, other things equal?
i. An increase in unused production capacity occurs.
ii. Business taxes decline.
iii. The costs of acquiring equipment fall.
iv. Widespread pessimism arises about future business conditions and sales revenues.
v. A major new technological breakthrough creates prospects for a wide range of profitable new products.
vi. How is it possible for investment spending to increase even in a period in which the real interest rate rises?
vii. Why is investment spending unstable?
viii. Is the relationship between changes in spending and changes in real GDP in the multiplier effect a direction (positive) relationship or is it an inverse (negative) relation- ship?
ix. How does the size of the multiplier relate to the size of the MPC? The MPS?
x. What is the logic of the multiplier-MPC relationship?
In year one, Adam earns $1,000 and saves $100. In year 2, Adam gets a $500 raise so that he earns a total of $1,500. Out of that $1,500, he saves $200. What is Adam's MPC out of his $500 raise?
Overview of Aggregate Demand and Aggregate Supply
Overview of Aggregate Demand and Aggregate Supply Model
Format your assignment according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.
Attachment:- Aggregate-Supply-Model.rar