Suppose That When The Interest Rate On Loans Is 16 Percent Businesses Find It Unprofitable To Invest In Machinery And E 1 (101.74 KiB) Viewed 39 times
Suppose that when the interest rate on loans is 16 percent, businesses find it unprofitable to invest in machinery and equipment. However, when the interest rate is 14 percent, $5 billion worth of investment is profitable. At 12 percent interest, a total of $10 billion of investment is profitable. Similarly, total investment increases by $5 billion for each successive 2-percentage-point decline in the interest rate. Describe the relevant relationship between the interest rate and investment in a table, on a graph, and as an equation. a. In a table: Instructions: Enter your answers as a whole number. Begin with the highest interest rate. Amount of Investment (Billions of Dollars) Interest Rate (Percent)
b. In a graph: Instructions: Use the tool provided 'Linear' to draw a single line (plot 9 points total). 18 Tools 16 / 14 Linear 12 10 Interest rate (percent) 8 4 2 0 ол 10 15 20 25 30 35 40 45 Investment (billions of dollars)
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!