Question

In \[I=f(r)\], which variable is the dependent variable?

Options

• \[I\] = Investment, the planned amount of investment

• \[Y\] = Aggregate Income

• \[I_r\] = Replacement Investment

• \[r\] = Rate of interest

Answer 1

In the investment function, \[I\] is the planned amount of investment. It is the dependent variable because it depends on the rate of interest.