Assume That the Investment Function Is Given by I =

question 70

Multiple Choice

Assume that the investment function is given by I = 1,000 - 30r, where r is the real rate of interest (in percent) . Assume further that the nominal rate of interest is 10 percent and the inflation rate is 2 percent. According to the investment function, investment will be:

• A)240.
• B)700.
• C)760.
• D)970.

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