In the Keynesian model, planned investment is inversely related to
A)the interest rate.
B)the level of income.
C)the wage rate.
D)the tax rate.

Question

Quizplus · Accepted Answer

In the Keynesian model, planned investment is inversely related to the interest rate. This is because when interest rates are high, the cost of borrowing increases, which makes it less attractive for businesses to invest in new projects or expand their operations. On the other hand, when interest rates are low, borrowing costs are lower, making it more appealing for businesses to invest.

In the Keynesian Model, Planned Investment Is Inversely Related to