In the classical model,the level of business investment was a function of

Question

Quizplus · Accepted Answer

In the classical model, the level of business investment was determined by both the expected profitability of investment projects (which is influenced by factors such as technology, consumer preferences, and expected future conditions) and the real interest rate (which represents the opportunity cost of investing in a particular project). Therefore, choice C is the correct answer. Neither nominal interest rate nor only the real interest rate or only the expected profitability of investment projects accurately represent the factors that influence business investment according to the classical model.

In the Classical Model,the Level of Business Investment Was a Function