What factors determine autonomous investment?
Answer to relevant QuestionsConsider the variables income, consumption, and investment. One relationship among them is relatively stable, the other quite volatile. Discuss. For each of the three income levels shown, pro vide appropriate data to satisfy or be consistent with the absolute and relative income hypotheses. What happens to the level of national income when intended investment is greater than actual investment? Fill in the missing cells for C, S, and I in the following table, given that autonomous consumption = $100, MPC = 0.50, and intended investment = $150. Indicate whether the economy is in equilibrium. Who are the winners and losers in periods of inflation?
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