THE INVESTMENT FUNCTION: NEW REALITIES AND INTERPRETATION REGARDING ITS HYPOTHESIZED RELATIONSHIPS

The paper is intended to test the applicability of the traditional theory of investment given contemporary settings. We will notice from the discussions that the investment function takes veritably the form of a behavioral function. Individuals particulaly firms, behave according to the rise and fall of the interest rate in their consuming desire to maximize profit. And it is expected that they react positively or adversely to the specific movements of the interest since it has impact on them.