-The Above Schedule Indicates That If the Real Interest Rate

question 68

Multiple Choice

-The above schedule indicates that if the real interest rate is 8 percent,then:

• A) we cannot tell what volume of investment will be profitable.
• B) $30 billion will be both saved and invested.
• C) $30 billion of investment will be undertaken.
• D) $60 billion of investment will be undertaken.

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Definitions:

Speculators

Individuals who attempt to profit from the buying and selling of assets, often predicting future price movements.

Arbitrageurs

Individuals or entities that attempt to profit from price differences of the same or similar financial instruments, on different markets or in different forms.

Capital Outflows

The movement of money for the purpose of investment, operations, or purchases away from a country or region.

U.S. Assets

Assets located within the United States, including real estate, stocks, bonds, and other financial instruments.