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Which formula expresses the relationship between investment and the rate of interest?

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Question

Which formula expresses the relationship between investment and the rate of interest?

Options

  • \[I=f(r)\]

  • \[I_g=I_n+I_r\]

  • \[PI=\frac{I}{Y}\]

  • \[MPI=\frac{\Delta I}{\Delta Y}\]

MCQ
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Solution

The investment function is written as \[I=f(r)\]. It means that the level of investment depends on the rate of interest.

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