To what extent does the interest rate influence the level of investment? [13 marks]
Chapter: AD-AS & National Income Determination
Assess the role of interest rate and how it will affect the investment expenditure, which is part of the aggregate demand (AD). An increase or decrease in investment will affect the equilibrium level of national income, which affects the general price level and national income, which is also measured in terms of real Gross Domestic Product (GDP).
07 August 2018