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The economy begins in equilibrium at point E, representing the real interest rate r 1 at which saving S 1 equals desired investment I 1. What will be the new equilibrium combination of real interest rate, saving, and investment if there is a technological innovation that increases the demand for investment goods

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Answer:

hello below is the missing diagram needed for the question

answer : point B

Step-by-step explanation:

when there is a technological innovation that increases the demand for investment and goods the real interest rate,savings and investment will take a positive outlook i.e take a shift to the right , this is due to the increase in investment and a corresponding increase in demand by consumers

Technological innovation are very vital for the expansion of production by companies and firms who provide either goods or services

The economy begins in equilibrium at point E, representing the real interest rate-example-1
User Irshad Ahmad
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