Macroeconomics (from the Greek prefix makro-meaning "large" + economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies .
Investment is often modeled as a function of income and interest rates, given by the relation I = f (Y, r), with the interest rate negatively affecting investment because it is the cost of acquiring funds with which to purchase investment goods, and with income positively affecting investment because higher income signals greater opportunities ...
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Investment: An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future. In an economic sense, an investment is the purchase of ...
Economics (/ ɛ k ə ˈ n ɒ m ɪ k s, iː k ə-/) is the social science that studies the production, distribution, and consumption of goods and services.. Economics focuses on the behaviour and interactions of economic agents and how economies work.
If the interest rate increases, investment drops which pushes down the demand for goods. The equilibrium level of output is lower.,!Decreasing relation between the interest rate and equilibrium output. Introduction to Macroeconomics TOPIC 4: The IS-LM Model
For a continuous duration of nearly 1700 years from the year 1 AD, India was the top most economy constituting 35 to 40% of world GDP. The combination of protectionist, import-substitution, Fabian socialism, and social democratic-inspired policies governed India for sometime after the end of British rule.
The IS–LM model, or Hicks–Hansen model, is a two-dimensional macroeconomic tool that shows the relationship between interest rates and assets market (also known as real output in goods and services market plus money market).
Investment Multiplier: An investment multiplier refers to the concept that any increase in public or private investment spending has a more than proportionate positive impact on aggregate income ...
Keynesian economics (/ ˈ k eɪ n z i ə n / KAYN-zee-ən; sometimes Keynesianism, named for the economist John Maynard Keynes) are various macroeconomic theories about how in the short run – and especially during recessions – economic output is strongly influenced by aggregate demand (total spending in the economy).
Classical economics posited that interest rates would adjust to equate saving and investment, avoiding a pile-up of inventories (general overproduction). A rise in saving would cause a fall in interest rates, stimulating investment, hence always investment would equal saving.