ainsleemm8427 ainsleemm8427

13-01-2021
Business

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What will be the level of interest rate, i, if investment at 0 interest is $16 million and the coefficient of invest, I, equals 0.4.

Respuesta :

SerenaBochenek SerenaBochenek

17-01-2021

Answer:

The right solution is "16 +0.4r". A further explanation is given below.

Explanation:

The given values are:

Autonomous investment,

I = 16 million

Coefficient of investment,

g = 0.4

As we know,

Economy's investment function will be:

⇒ [tex]I(r) = I + gr[/tex]

On substituting the given values, we get

⇒ [tex]=16+0.4r[/tex]

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