2A.What is the definition of "Gross Private Domestic Investment (Ig)"?

2B. Now, create a list of the determinants of Investment or "Gross Private Domestic Investment" (Ig)

Read each of the three scenarios below. For each scenario,

(1) Choose a determinant which best explains what happens to Investment (Ig).

(2.) Why did you choose that determinant?

(3. ) Explain if "Gross Private Domestic Investment or Ig" will decrease or increase.

Remember the definition of Investment in macroeconomics.

2C. An innovation creates new precision machining equipment which makes production processes more efficient and less costly.

2D. Businesses are uncertain about the future due to political uncertainty, violence in American cities and towns, coronavirus and global instability including trade wars.

2E. There is an increase in the real interest rate. (Ask yourself, what's the real interest rate?

How does this impact expectations or net profits?)