Answer the question on the basis of the following table: $\begin{array}{l}
\text { Expected Rate Amount of Investment With This }\
\begin{array} { c c c }
\underline{\text { of Return } ( \% ) }& \underline{\text { Rate of Return or Higher } ( \$ B ) }\
12\%& \$ 10 \
10 & 20 \
8 & 30 \
6 & 40 \
4 & 50 \
2 & 60
\end{array}
\end{array}$ The given schedule indicates that if the real interest rate is 8 percent,then:
A) we cannot tell what volume of investment will be profitable.
B) $30 billion will be both saved and invested.
C) $30 billion of investment will be undertaken.
D) $60 billion of investment will be undertaken.

Question

Answer the question on the basis of the following table: $\begin{array}{l}
\text { Expected Rate Amount of Investment With This }\
\begin{array} { c c c } 
\underline{\text { of Return } ( \% ) }& \underline{\text { Rate of Return or Higher } ( \$ B ) }\
12\%& \$ 10 \
10 & 20 \
8 & 30 \
6 & 40 \
4 & 50 \
2 & 60
\end{array}
\end{array}$ The given schedule indicates that if the real interest rate is 8 percent,then:
A) we cannot tell what volume of investment will be profitable.
B) $30 billion will be both saved and invested.
C) $30 billion of investment will be undertaken.
D) $60 billion of investment will be undertaken.

Quizplus · Accepted Answer

According to the schedule, at a real interest rate of 8 percent, the point where saving is equal to investment is at $30 billion. Therefore, $30 billion of investment will be undertaken.

Answer the Question on the Basis of the Following Table