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.

Question

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.

Quizplus · Accepted Answer

According to the schedule, at a real interest rate of 8 percent, the planned investment is $30 billion. Therefore, choice C is correct as $30 billion of investment will be undertaken. Option A is incorrect as we can tell the profitable investment amount, which is $30 billion. The schedule does not indicate that $30 billion will be both saved and invested, so option B is incorrect. The schedule does not show a planned investment of $60 billion, so option D is incorrect.

The Above Schedule Indicates That If the Real Interest Rate