chapter 16 instability in the private economy: investment

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Chapter 16 Instability in the Private Economy: Investment

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Page 1: Chapter 16 Instability in the Private Economy: Investment

Chapter 16

Instability in the Private Economy: Investment

Page 2: Chapter 16 Instability in the Private Economy: Investment

Copyright © 2003 by Pearson Education, Inc. 16-2

Figure 16-1 Real Gross Private Domestic Investment and Its Three Components, 1960–2001

Page 3: Chapter 16 Instability in the Private Economy: Investment

Copyright © 2003 by Pearson Education, Inc. 16-3

Figure 16-2 The Behavior of Actual Sales, Expected Sales, Gross Investment, Net Investment, and Replacement Investment for the Mammoth Electric Company Described in Table 16-1.

Page 4: Chapter 16 Instability in the Private Economy: Investment

Copyright © 2003 by Pearson Education, Inc. 16-4

Figure 16-3 The Relation of the Net Investment Ratio (In/Y) to the Growth Rate of Real GDP (ΔY/Y) in the U.S. Economy, 1960–2001

Page 5: Chapter 16 Instability in the Private Economy: Investment

Copyright © 2003 by Pearson Education, Inc. 16-5

Figure 16-4 The Effect of a Drop in the User Cost of Capital (u) on the Desired Capital-Output Ratio (v*)

Page 6: Chapter 16 Instability in the Private Economy: Investment

Copyright © 2003 by Pearson Education, Inc. 16-6

Figure 16-5 Change in Real Investment in Computers and Peripherals and in the Computer Deflator, 1988–2001

Page 7: Chapter 16 Instability in the Private Economy: Investment

Copyright © 2003 by Pearson Education, Inc. 16-7

International Perspective The Level and Variability of Investment Around the World

Page 8: Chapter 16 Instability in the Private Economy: Investment

Copyright © 2003 by Pearson Education, Inc. 16-8

Figure 16-6 Effect on Output and the Interest Rate of a Shift in the Level of Investment Relative to the Interest Rate