Which of the following are part of Keynes' critique of the loanable funds model? Choose all that apply. Saving is a passive residual of income, not a function of interest rates Savings drives investment, not the other way around Investment is a function of income, not of interest rates Investment decision are made facing a fundamental uncertainty about the future Saving does not equal investment at the macroeconomic equilibrium Investment is determined by expectations of the future and expected profitability, not the pool of savings available to be lent or interest rates

MACROECONOMICS FOR TODAY
10th Edition
ISBN:9781337613057
Author:Tucker
Publisher:Tucker
Chapter8: The Keynesian Model
Section: Chapter Questions
Problem 20SQ
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Which of the following are part of Keynes' critique of the loanable funds model? Choose all that apply.
Saving is a passive residual of income, not a function of interest rates
Savings drives investment, not the other way around
Investment is a function of income, not of interest rates
Investment decision are made facing a fundamental uncertainty about the future
Saving does not equal investment at the macroeconomic equilibrium
Investment is determined by expectations of the future and expected profitability, not the pool of savings available to
be lent or interest rates
Transcribed Image Text:Which of the following are part of Keynes' critique of the loanable funds model? Choose all that apply. Saving is a passive residual of income, not a function of interest rates Savings drives investment, not the other way around Investment is a function of income, not of interest rates Investment decision are made facing a fundamental uncertainty about the future Saving does not equal investment at the macroeconomic equilibrium Investment is determined by expectations of the future and expected profitability, not the pool of savings available to be lent or interest rates
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