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Government expenditure.

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Q: What does investment affect in the keynesian model?
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What is the limitation of keynesian investment multiplier?

limitation of keynesian theory??


What are the factors that affect investment?

In a nutshell, the key determinants that affect investment are:The Keynesian Marginal Efficiency of Capital Theory, I=f(r)The Keynesian explanation if there is non ceteris paribus, I=f(all other factors)The Accelerator TheoryThe role of firms' profitsAnd then a collection of the other factors, being exchange rates et cetera.


Difference between keynesian model and AD-AS model?

Keynesian model is able to show how leakages and injections can influence the economy. AD-AS model is able to show changes in prices (inflation).


How would a keynesian view the money demand curve and the investment demand curve?

by looking at it


What are the four sectors in Keynesian macroeconomic model?

The four sectors in Keynesian macroeconomic model are business, household, foreign sector and government. The Keynesian macroeconomics focuses on a broad scale where the above mentioned sectors play an important role.


What causes a difference between desired spending and income in the monetarist model in the Keynesian model?

In the monetarist model, a difference between desired spending and income is caused by either an excess demand for money (MD > MS) or an excess supply of money (MS > MD). An excess demand for money reduces desired spending, and an excess supply increases it. In the Keynesian model, changes in desired spending (particularly in desired investment spending) cause the difference.


What is the price level assumed to be in the simple Keynesian model of determination of income?

exogenous and constant


What is Keynesian Transmission Mechanism?

The Keynesian transmission mechanism is the process whereby changes in the monetary sector (increase or decrease in the interest rate i) have an impact in the real sector, by increasing or decreasing Investment (I), otherwise known as Capital Formation. There is an inverse or negative relationship between the two - this means that as the interest rate i increases, the capital formation or investment in the economy I decreases.


What are the determinants of induced consumption in Keynesian model of a closed economy with a government sector?

Income and taxes


What production is likely in the Keynesian model whenever unplanned inventory increases occur in the economy?

Speed up


What factors affect the rate of return of an investment at maturity?

What factors affect the rate of return of an investment at maturity?


What has the author Klaus Schmidt-Hebbel written?

Klaus Schmidt-Hebbel has written: 'Fiscal policy in classical and Keynesian open economies' -- subject(s): Fiscal policy, Keynesian economics 'Income inequality and aggregate saving' -- subject(s): Saving and investment, Income distribution 'External shocks in classical and Keynesian economies' -- subject(s): Economic stabilization, Commercial policy, Keynesian economics, Budget deficits 'Fiscal and monetary contractions in Chile' -- subject(s): Monetary policy, Tax and expenditure limitations, Fiscal policy, Rational expectations (Economic theory) 'Saving across the world' -- subject(s): Case studies, Consumption (Economics), Fiscal policy, Saving and investment