CBSE Class 12-commerce Answered
Kindly explain the line.
" Investment demand depends upon marginal effeciency of capital and rate of interest. But in a simple economy Keynes assumed investment to be autonomously given to the economy."
Asked by anujbajpai44 | 30 May, 2020, 09:28: PM
Expert Answer
According to Keynes, investment decisions depend on MEC - (expected rate of return on investment expenditure) and rate of interest (investment is inversely related to the rate of interest)
However in Keynes’ model of equilibrium level of national income, in a closed economy with no government AD=C+I.
For the sake of simplicity, Keynes assumes that all investment is autonomous and, hence, independent of income.
Thus in Keynes’ model investment is given as autonomous and it does not change as output (or national income) changes.
Answered by Christina | 31 May, 2020, 02:43: PM
Concept Videos
-
National Income Accounting
National Income Accounting -
National Income Accounting
National Income Accounting -
National Income Accounting
National Income Accounting -
National Income Accounting
National Income Accounting -
National Income Accounting
National Income Accounting
CBSE 12-commerce - Macroeconomics
Asked by n0324352 | 21 Nov, 2023, 08:59: PM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by garvit | 24 Nov, 2022, 11:12: AM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by mokeshkumardop | 30 Sep, 2021, 05:48: PM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by godwinjerald99 | 13 Jul, 2020, 06:52: PM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by anujbajpai44 | 27 Jun, 2020, 02:29: PM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by ravimundrakd | 17 Jun, 2020, 02:43: PM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by fazzdoc110 | 12 Jun, 2020, 07:38: PM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by anujbajpai44 | 30 May, 2020, 09:28: PM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by anujbajpai44 | 25 May, 2020, 06:13: PM
ANSWERED BY EXPERTCBSE 12-commerce - Macroeconomics
Asked by anujbajpai44 | 13 May, 2020, 07:33: PM
ANSWERED BY EXPERT
