Some economists argue that the animal spirits of investors are so important in determining the level of

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Some economists argue that the €œanimal spirits€ of investors are so important in determining the level of investment in the economy that interest rates do not matter at all. Suppose that this were true, that investment in no way depends on interest rates.

a. How would Figure 11.4 be different?

P and Z do not shift the r=0 line Binding Situation IS Y* Aggregate output (income), Y Internet rate, r

b. What would happen to the level of planned aggregate expenditure if the interest rate changed?

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Principles of Macroeconomics

ISBN: 978-0134078809

12th edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

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Question Posted: Dec 27, 2018 07:20 AM

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Some economists argue that the animal spirits of investors are so important in determining the level of

Question:

P and Z do not shift the r=0 line Binding Situation IS Y* Aggregate output (income), Y Internet rate, r

Step by Step Answer:

a If investment depended in no way on interest rates planned investment in Fig...View the full answer

Principles of Macroeconomics

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