Question

What is the difference between the investment demand curve and the investment schedule for the economy?

Answer 1

Solution

-Investment Demand Curve is a downward sloping line.

The level of investment spending is determined by the real interest rate

-Investment Schedule is a constant line.

Relates the amount of investment to the various levels of GDP.

An inverse relationship between investment and interest rate, while the latter shows nocorrelation between investment and income

In the aggregate demand-aggregate supply model, the economy's price level is assumed to be:Variable, unlike in the aggregate expenditures model