Desired investment function would change the way

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Reference no: EM136571

Q1. Assume the price elasticity of demand for heating oil is 0.7 in the long run also 0.2 in the short run. If price heating oil increased from $1.8 to $2.2 per gallon, illustrate the percentage change to quantity of heating oil demand in the short run?

Q2. We have Desired Investment function= 380-400r and Desired Savings Function= 300+600r now we have a new desired investment function=350-400 and same desired savings function. Name four reasons why the desired investment function would change the way it did?

Reference no: EM136571

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