5. The m ajor determinants of investment are (a) current sales relative to the productive capacity of

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5. The m ajor determinants of investment are

(a) current sales relative to the productive capacity of the existing productive facilities,

(b) expectations about future sales, and

(c) the interest rate. Keynes perceived that, during a period of depressed economic conditions, investment would be largely unresponsive to changes in the interest rate.

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Economics Private And Public Choice

ISBN: 9780123110404

2nd Edition

Authors: James D Gwartney; Richard Stroup; A H Studenmund

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