(Advanced analysis)Answer the question on the basis of the following information for a private closed economy where C is consumption,Y is the gross domestic product,I_g is gross investment,and i is the interest rate: $\begin{aligned} C & = 40 + 0.8 Y \ l _ { g } & = 60 - 2 i \ i & = \bar { i } = 10 \end{aligned}$ Refer to the information.Given that the interest rate is 10 (percent),the amount that businesses will want to invest will be: A) $58. B) $60. C) $40. D) $20.

Question

Quizplus · Accepted Answer

It is given that gross investment is represented by I_g. Therefore, the amount of investment is independent of the interest rate. Thus, the answer will be the same regardless of the given interest rate. The given information does not provide any specific value for I_g, so we cannot directly calculate the amount of investment. Therefore, we cannot choose options A or B for an answer. The given choices must depend on the interest rate, which is not correct. Thus, the correct answer would be C as it is the only answer choice that makes sense.

(Advanced Analysis)Answer the Question on the Basis of the Following C=40+0.8Ylg=60−2ii=iˉ=10\begin{aligned}C & = 40 + 0.8 Y \\l _ { g } & = 60 - 2 i \\i & = \bar { i } = 10\end{aligned}Clg​i​=40+0.8Y=60−2i=iˉ=10​

(Advanced Analysis)Answer the Question on the Basis of the Following $\begin{aligned}C & = 40 + 0.8 Y \\l _ { g } & = 60 - 2 i \\i & = \bar { i } = 10\end{aligned}$