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4. The investment demand curve The following table shows the expected rate of profit and the cumulative amount of investment with that rate of profit

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4. The investment demand curve The following table shows the expected rate of profit and the cumulative amount of investment with that rate of profit or higher in a hypothetical economy. For example, $60 billion worth of investment projects have an expected rate of profit that is greater than or equal to 12%. Put another way, at an interest rate of 12%, the amount of investment demanded equals $60 billion. Expected Rate of Profit Cumulative Investment at this Rate of Profit or Higher (Percent) ( Billions of Dollars) 16 40 12 60 18 80 100 Using the blue points (circle symbol), plot the hypothetical economy's investment demand curve (1) on the graph. Line segments will automatically connect the points. (? O Investment Function INTEREST RATE (Percent) 20 40 60 80 100 120 140 160 REAL INVESTMENT (Billions of dollars)

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