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Q. Show the investment function in the IS-LM model?
The investment function in the IS-LM model
Investment was an exogenous variable in cross model owing to the fact that interest rate was exogenous. Now that interest rate is endogenous, investment will be endogenous. As for classical model, investment relies negatively on the real interest rate but then since R = r in the IS-LM model, we can make investment a function of R: I = I(R).
Use the monopoly model to explain how providers are able to charge different groups of patients different prices.
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