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Let's suppose we are living in a country in which opportunities of making profits, and entrepreneurial activity are main determinants of investment demand. In this
Let's suppose we are living in a country in which opportunities of making profits, and entrepreneurial activity are main determinants of investment demand. In this scenario, how is parameter b? How this affect the elasticity of investment with respect to changes in interest rate? How a cut in the benchmark interest rate could affect the quantity of investment in the economy? Explain thoroughly, use models, and graphs.
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