A Favorable Shock to Productivity May Raise Investment by

question 19

Multiple Choice

A favorable shock to productivity may raise investment by

• A)increasing firms' internal funds.
• B)reducing government spending, which would otherwise crowd out investment spending.
• C)causing interest rates to fall as the economy expands.
• D)reducing taxes on corporate profits.

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Definitions:

Rainfall Intensity

The rate at which rain falls over a given area, measured in millimeters per hour or inches per hour.

Municipal Water

Water that is treated and supplied by a municipal corporation for public use in cities and towns.

Spring Water

Water that flows naturally to the surface from a subsurface aquifer.

Bottled Water

Packaged drinking water sold in plastic or glass bottles; its quality can vary depending on the source and treatment methods.