Define investment demand function

Investment demand function: Investment demand function is the relationship among rate of interest and investment demand. There is an inverse relationship among the rate of interest and investment demand.

High interest rate implies lower level of investment demand. It is since higher rate of interest is to be matched with uniformly higher marginal effectiveness of capital. MEC begins reducing as investment level is increased. Accordingly, investment demand would rise only corresponding to the lower level of MEC all along with lower level of rate of interest.

View Complete Question

Related Questions in Microeconomics

Q : For luxury items absolute value of

The absolute value of price elasticity of demand tends to be lower when: (w) the greater the number of substitutes available. (x) the more important the product is in classical budgets. (y) for necessities than for luxury items. (z) when more time is

Q : Illustrate ready-to-eat cereal industry

Brands of ready-to-eat cereal by Kellogg, Post, General Mills and Quaker [for example Frosted Flakes, Raisin Bran and Cheerios] account for more 85 percent of all breakfast cereals sold. Here the ready-to-eat cereal industry is an illustration of: (w)

Q : Labor markets profit maximization When,

When, after hiring the very last worker, the organization’s profit is similar as it was before the last worker was hired, then the firm must: (1) Hire more workers to raise the profit. (2) Layoff some workers to raise the profit. (3) Not appoint any more workers

Q : Problem regarding Craft Unions Can

Can someone help me in finding out the right answer from the given options. The craft unions historically tried to systematize all the workers in: (1) A specific company, in spite of size. (2) The United States. (3) The specific broad industry. (4) Relatively highly s

Q : Different pure economics rent Pure

Pure economic rents are different most from economic profits in which they are: (w) received by the owners of productive resources. (x) frequently costs to the firm using the resources which generate them, but not to society as a whol

Q : Principles of Macroeconomics Questions

(a) Explain the relationship between full employment of resources and full production. (b) Look at the following production possibilities curve illustrating the possibilities in Sluggerville for producing bats and/or p

Q : Negative-positive coefficient in

When you compute cross-elasticity of demand, what are you trying to find out? What do a negative coefficient and a positive coefficient imply?

Q : Levels of Poverty In 2005 year, the

In 2005 year, the proportion of American sub-populations along with family incomes below the official poverty line was maximum for individuals: (1) 0 to 10 years old. (2) 11 to 25 years old. (3) 26 to 45 years old. (4) 46 to 65 years old. (5) more tha

Q : Labor Contracts-Check-off Provisions

I have a problem in economics on Labor Contracts-Check-off Provisions problem. Please help me in the given question. The statement of check-off provision: (1) Was outlawed through Taft Hartley Act. (2) Is unlawful in union shops. (3) Simplifies the un

Q : Determine total revenue when maximizes

Total revenue when this firm maximizes economic profits would be: (w) $72,000 per period. (x) $80,000 per period. (y) $96,000 per period. (z) $100,000 per period.

Discover Q & A

Leading Solution Library

Avail More Than 1444762 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1946916
Asked

3,689

Active Tutors

1444762

Questions
Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment