A production function shows how much output can be produced with a given ....
Yes, it is possible for gross investment to be positive when net investment is ... as
the real interest rate rises because the higher return to saving encourages higher
.... (d) The increase in expected future income decreases current desired saving,
It represents the expected increase in Consumption that results from a one unit ....
We observe in the aggregate economy that when indebtedness goes up, ... The
higher the real rate of interest, the fewer investment opportunities will be
profitable. ... If the interest rate is 4%, all investments with an expected rate of
Jan 8, 2012 ... The Journal of Economic Perspectives gratefully acknowledges the support of
Macalester .... efficient durables, for example, changes relative prices for all
consumers. ..... value of a set of possible energy efficiency investments given
assumed capital costs, ... rate of return) is 5.6 or 7.8 percent, respectively.
Economic growth, i.e., the increase of the rate of output, depends largely upon ...
investment is the rate of return, appropriately adjusted for any differences in ...
Since, at a given rate of interest, producers would wish to acquire all capital ...
Further, it requires that the expected marginal profitabilities of investment
In the period from 2007 to 2011, both inflation and interest rates have generally
trended .... into the most productive investment opportunities. ... outcome, your
expected return would be $10,644 ($9900 × 0.07 + $10,700 × 0.93). ..... It is
possible for a coupon bond to have a negative nominal interest rate, as long as
Feb 14, 2013 ... Further, this 7.8 percent unemployment rate rivals or exceeds the peak ... a return
to full employment through policy measures (particularly fiscal policy). .... to weak
employment opportunities, and are thus not counted among .... this full recovery
be expected at all, given the policy course we have charted?
The revised estimate of the expected rate of return on the stock would be the old
estimate plus the sum ... opportunity exists by buying portfolio G and selling an
equal amount of portfolio E. ... This portfolio must show non-negative payoffs in
all scenarios. ... The payoff table for this zero investment portfolio in each
interest rates in the economy mysteriously change as directed. At least .....
projects or, if they have the funds for the investment project, the opportunity cost
the economy recovers and once it returns to full employment. the chapter
describes the .... All three elements of the model contribute to the model's
predicted ... the expected withdrawal of some of the temporary income support
policies that were ..... opportunities than their desired level of saving at a given
interest rate can.
Saving is a source of loanable funds and investment is the demand for loanable
funds. ... in the economy after paying for consumption and government purchases
. ... borrow money at 6% to invest in a project that will yield a 10% rate of return, ...
the higher the interest rate, the higher the opportunity cost to not lend money.