Exhibit: Saving, Investment, and the Interest Rate 2 the Economy

question 4

Multiple Choice

Exhibit: Saving, Investment, and the Interest Rate 2 The economy begins in equilibrium at point E, representing the real interest rate r₁ at which saving S₁ equals desired investment I₁. What will be the new equilibrium combination of real interest rate, saving, and investment if there is a technological innovation that increases the demand for investment goods?

• A)point A
• B)point B
• C)point C
• D)point D

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Definitions:

Allergic Response

The body's immune system reacting abnormally to a foreign substance, such as pollen, food, or medication, resulting in symptoms like itching, swelling, and difficulty breathing.

Antibiotic

Substances used to kill or inhibit the growth of bacteria, used primarily in the treatment and prevention of bacterial infections.

Febrile Seizures

Convulsions in young children caused by a spike in body temperature, often from an infection.

Antipyretic

A type of medication used to lower fever and help manage the body's temperature control.