Assume that for the entire business sector of the economy there is $0 worth of investment projects which will yield an expected rate of return of 25 percent or more. But there are $15 worth of investments which will yield an expected rate of return of 20-25 percent; another $15 with an expected rate of return of 15-20 percent; and similarly an additional $15 of investment projects in each successive rate of return range down to and including the 0-5 percent range.
-Refer to the above information. The expected rate of return curve:

Question

Quizplus · Accepted Answer

The expected rate of return curve is equivalent to the investment-demand curve, as it shows the amount of investment demanded for each corresponding expected rate of return. This curve represents the investment opportunities available in the economy and the level of investment at each expected rate of return.

Assume That for the Entire Business Sector of the Economy