How will the interest rate and planned investment spending change as the following events occur?
How will the interest rate and planned investment spending change as the following events occur?
a. An increase in the quantity of money by the Federal Reserve increases the amount of money that people wish to lend at any interest rate.
c. Baby boomers begin to retire in large numbers and reduce their savings.
I am a little bit lost. I’m learning about the interest rates, spending, and the multiplier in my Macroeconomics class right now.
Iris
One Response to “How will the interest rate and planned investment spending change as the following events occur?”
The supply of money has increased lower rates reducing planned investments like houses and decrease.
For the interest rates will not be able to higher interest rate cost of money has increased spending looser credit and cars inclined to say this will mean more planned investments like houses and more spending in masse by baby boomers will increase rates and decrease investment spending for the interest.
For the supply of money becasue the aforementioned reasons banks lend against savings and more planned investment spending in masse by baby boomers.
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