CH9-17.04.09 - Forward Shifting ERR r IDC I Acquisition...

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17.04.2009 CHAPTER 9 BUILDING THE AGREEGATE EXPENDITURES MODEL Shift in the Investment-Curve The investment demand curve depends on a ceteris paribus assumption. It gives the functional relationship between r&I. When those other things change, IDC shifts. Shifting means a change in the IDC and making more/less investment at the same level of C. The other things are generally factors, which change the expectations of r, which is the rate of return on investments.
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Unformatted text preview: Forward Shifting ERR, r IDC I Acquisition, Maintenance and Operating Costs ↑ ↓ ← Sabit Taxes ↑ ↓ ← Sabit Stock of Capital Goods on Hand ↑ ↓ ← Sabit Technological Changes ↑ ↑ → Sabit Expectations ↑ ↑ → Sabit An Autonomous Investment Schedule tells the assumption that there is no relationship between I and the level of GDP. Induced Investment suggest that when the GDP grows larger the investment increase....
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