Determining current equilibrium interest rate

Reference no: EM1373780

Consider a country with an economic structure consistent with the assumption of the classical model. Assume that businesses in this country suddenly anticipate higher future profitability from investments they undertake today. Give reasons to explain whether or how this could affect the following:
1.The current equilibrium interest rate
2.The current equilibrium real GDP
3.The current equilibrium employment
4.The current equilibrium saving
5.The future equilibrium real GDP

Reference no: EM1373780

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