Why would an investment demand curve be sloping downward?
The interest rate is the cost of borrowing that is the borrower has to pay to the lender. The lender charges a certain percentage of the principal amount from the borrower to lend money. The interest rate is of two types - nominal interest rate and real interest rate. Nominal interest rate is the rate of interest that prevails in the market. Real interest rate is the rate of interest is adjusted for inflation.
Answer and Explanation:
Investment demand curve is a graphical representation that shows relationship between rate of interest and investment. The diagram of investment...
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from Corporate Finance: Help & ReviewChapter 2 / Lesson 6