At any given level of the interest rate, expectations are likely to be more optimistic and planned investment is likely to be higher when output is growing rapidly than when it is growing slowly.

Question

Quizplus · Accepted Answer

This is because when output is growing rapidly, there is a higher demand for goods and services, leading to higher profits and greater opportunities for investment. When output is growing slowly, there may be less confidence in the economy and less demand for investment.

At Any Given Level of the Interest Rate, Expectations Are