An economy's investment demand curve shows the inverse relationship between the quantity of investment demanded and the market interest rate,other things held constant.

Question

Quizplus · Accepted Answer

This statement accurately describes the relationship between investment demand and market interest rate. As the interest rate increases, the cost of borrowing money for investment purposes also increases, leading to a decrease in the quantity of investment demanded. Conversely, as the interest rate decreases, the cost of borrowing money for investment purposes decreases, leading to an increase in the quantity of investment demanded. This inverse relationship is represented by the downward sloping investment demand curve.

An Economy's Investment Demand Curve Shows the Inverse Relationship Between