Respuesta :

Answer:

When investment decreases, this will make the interest rate to increase. When interest rates increase, the money supply will will decrease, shifting the aggregate demand curve to the left. This will eventually lead to a decrease in total spending, which in turn will result in an increase in the unemployment rate.

Answer:

Suppose there is decrease in investment then supply curve to shift to the left, the price level to rise and out output level to fall.

Explanation:

  • A decrease in investment would shift the aggregate demand curve to the left by an amount equal to the multiplier times the change in investment.
  • The relationship between investment and interest rates is one key to the effectiveness of monetary policy to the economy.

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