Page 126 - DECO201_MACRO_ECONOMICS_ENGLISH

Unit 6: Investment

3. Differentiate between autonomous and induced consumption. Notes
4. Illustrate with the help of an example, how rate of investment affects investment decisions.
5. Explain the concept of marginal efficiency of capital, in brief. How does it affect investment
decisions?
6. Discuss the major factors that affect investment decisions, in brief.
7. Explain Accelerator theory of Investment.
8. "Aggregate expenditure function is the sum of consumption and investment function".
Validate
9. "Investment decisions are largely influenced by expectations of future demand conditions".
Substantiate
10. Describe the concept of re-investment.

Answers: Self Assessment

1. (b) 2. (a)
3. (c) 4. (d)
5. (a) 6. inversely

7. depression 8. Marginal Efficiency of Capital
9. Rate of interest 10. Reinvestment
11. True 12. False

13. True 14. False
15. True

6.7 Further Readings

Books Dr. Atmanand, Managerial Economics, Excel Books, Delhi.
H.L Ahuja, Macro Economic Theory and Policy, B. Chand Publications
Lipsey & Chrystal, Economics-Indian Edition, Oxford University Press, 2007

Misra and Puri, Economic Environment of Business, 5th Edition, Himalaya Publishing
House

Online links http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=induced
+investment
http://www.jstor.org/pss/1810161

http://www.economicsconcepts.com/concept_of_investment.htm
http://www.indiastudychannel.com/resources/107657-What-are-differences-
between-Autonomous.aspx

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