What Are The Determinants Of Autonomous Investments?
The major determinants of autonomous investments include: Interest rates, expected returns, capital assets, changing technology and change in the price levels. Increase in interest rates result in increased cost of borrowings which reduce the demand for the autonomous investments. If an economy is expected to boom in the near future, the autonomous investment can face an increase in demand. Increase in capital asset might result in decline of autonomous investment. Changing technology requires more financing therefore cause increase in autonomous investments. Increase in prices of capital assets might result in decline of demand of autonomous investment.
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