Use the Model Developed in Chapter 3 and Assume That

question 83

Multiple Choice

Use the model developed in Chapter 3 and assume that consumption does not depend on the interest rate. In this case, when there is a technological advance that leads to an increase in investment demand:

• A) investment increases and the interest rate rises.
• B) investment is unchanged and the interest rate rises.
• C) investment and the interest rate are both unchanged.
• D) investment increases and the interest rate falls.

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