In microeconomics describe the impact of a decline in demand for investment goods on the labor and capitol mar

Question

In microeconomics describe the impact of a decline in demand for investment goods on the labor and capitol mar

Answer 1

A decline in demand for investment goods imply a slower growth in the capital stock and hence a slower growth in the capacity of the economy to produce. This would mean a slower growth in the demand for labor. It would also mean a lower demand for funds for implementing capacity creation projects. This would mean possibly a lower market rate of interest in the capital market and lower demand for increasing equility of the companies.

Answer 2

Bam!