A decrease in the interest rate will cause a(n) increase in the investment deman
ID: 1208378 • Letter: A
Question
A decrease in the interest rate will cause a(n)
increase in the investment demand curve.
decrease in the investment demand curve.
movement up along the investment demand curve.
movement down along the investment demand curve
In the U.S., between 1990 and 2007, capital stock and the level of technology increased dramatically. During the same period, employment and real wages rose. What do these set of events suggest?
The demand for labor increased by more than the increase in supply of labor over this period.
The demand for labor increased by less than the increase in supply of labor over this period.
The demand for labor decreased while the supply of labor increased over this period.
The demand for labor and the supply of labor decreased over this period.
increase in the investment demand curve.
decrease in the investment demand curve.
movement up along the investment demand curve.
movement down along the investment demand curve
Explanation / Answer
1. A decrease in the interest rate will cause an increase in the investment demand curve.
Explanation: - because Low rate of interest attract more and more borrowings by the industries and market, thereby the investment spending and consumption increase a lot.
2. In the U.S., between 1990 and 2007, capital stock and the level of technology increased dramatically. During the same period, employment and real wages rose. What do these set of events suggest?
Answer- The demand for labor decreased while the supply of labor increased over this period, with the advent of technology and capital assets like machinery replacing the human labor, the demand for human labor is decreased over a time, since the machines can produce multiple times faster and efficient than human, but a skilled labor is only employed to run those machines.