The investment function tells us, at any given interest rate
A)how many funds people will invest in the stock market.
B)how many funds people will earn on their stock market investments.
C)how profitable it will be for firms to expand.
D)how much businesses will spend on adding to the capital stock.

Question

Quizplus · Accepted Answer

The investment function relates to the amount that businesses will spend on adding to their capital stock, which represents their investment in productive capacity, such as machinery, equipment, and buildings. This investment spending can have a significant impact on economic growth and employment, as it contributes to the expansion and improvement of production capabilities. The interest rate plays an important role in determining the level of investment, as it affects the cost of borrowing funds to finance the investment and the expected return on investment.

The Investment Function Tells Us, at Any Given Interest Rate