This study applied Keynesian Theory and statistics methods to establish a regression model, in order understand whether an increase in private investment has any significant influence on GDP, interest rates and price in Taiwan. This empirical analysis was established on the basis of IS-LM and AD-AS theories. SPSS was utilized to perform tests on the quarterly data during the past 37 years (1971~2008) in Taiwan in order to explore relationships among private investment, interest rates, price and GDP. Findings, that an increase in Private investment would increase GDP, lower interest rates, and increase price. On the contrary, a drop in private investment and would reduce GDP. To sum up, there is a positive correlation between private investment and GDP, as well as between private investment and price. There is a negative correlation between private investment and interest rates. Meanwhile, private investment have high explanatory power over GDP and relatively low explanatory power over interest rates and price. The empirical results are consistent with Keynesian IS-LM and AD-AS Model. A rise in private investments and will reduce interest rates, and increase GDP and price.