$$\begin{array} { | c | c | }
\hline \text { Expected Rate of Return (\%) } & \begin{array} { c }
\text { Amount of Investment With This Rate of Return } \
\text { or Higher (\$B) }
\end{array} \
\hline 12 \% & \$ 10 \
\hline 10 & 20 \
\hline 8 & 30 \
\hline 6 & 40 \
\hline 4 & 50 \
\hline 2 & 60 \
\hline
\end{array}$$ The investment schedule in the given table indicates that if the real interest rate is 8 percent, then
A) we cannot tell what volume of investment will be pro?table.
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

$$\begin{array} { | c | c | } 
\hline \text { Expected Rate of Return (\%) } & \begin{array} { c } 
\text { Amount of Investment With This Rate of Return } \
\text { or Higher (\$B) }
\end{array} \
\hline 12 \% & \$ 10 \
\hline 10 & 20 \
\hline 8 & 30 \
\hline 6 & 40 \
\hline 4 & 50 \
\hline 2 & 60 \
\hline
\end{array}$$ The investment schedule in the given table indicates that if the real interest rate is 8 percent, then
A) we cannot tell what volume of investment will be pro?table.
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 table, an expected rate of return of 8% corresponds to an amount of investment with this rate of return or higher of $30 billion. Therefore, if the real interest rate is 8%, $30 billion of investment will be undertaken.

The Investment Schedule in the Given Table Indicates That If