Type: T Topic: 5 E: 160 MA: 160 118. Assume there are no prospective investment projects (that will yield an expected rate of return (r) of 25 percent or more, but that there are $5 billion of investment opportunities with an expected rate of return between 20 and 25 percent, an additional $5 billion between 15 and 20 percent, and so on. The investmentdemand curve for this economy is:
A. r I 25% $10 20 15 15 20 10 25 5 30 0 35 Answer: B
B. r I 25% $ 0 20 5 15 10 10 15 5 20 0 25
C. r I 20% $10 15 20 10 30 5 40 0 50
D. r 25% 20 15 10 5 0 I $ 5 10 15 20 25 30
Answer:D
Type: T Topic: 5 E: 160 MA: 160 118. Assume there are no prospective investment projects (that will yield an expected rate of return (r) of 25 percent or more, but that there are $5 billion of investment opportunities with an expected rate of return between 20 and 25 percent, an additional $5 billion between 15 and 20 percent, and so on. The investmentdemand curve for this economy is:
A. r I 25% $10 20 15 15 20 10 25 5 30 0 35 Answer: B B. r I 25% $ 0 20 5 15 10 10 15 5 20 0 25 C. r I 20% $10 15 20 10 30 5 40 0 50 D. r 25% 20 15 10 5 0 I $ 5 10 15 20 25 30