What effect does increase in investment have on price, output and employment?
When there is an increase in investment, aggregate demand increases...so what effect does this have on the price level, real output and the employment?
Investment best answer:
Answer by ru40342
In closed economy, when investment increase (FDI or portfolio), Aggregate demand will rise and output will rise as well. Increased aggregate demand will cause rise in prices (in long run) and decrease the unemployment
Hope this helps!
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2013-05-16 Russell Investments Center
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2013-05-16 Russell Investments Center
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