Which of the Following Statements Is True

question 63

Multiple Choice

Which of the following statements is true?

• A)The observed relationship between the investment share of GDP and the real interest rate is negative, as predicted by theory.
• B)There is no steady relationship between the investment share of GDP and real interest rates, contrary to what is predicted by theory.
• C)The observed relationship between the investment share of GDP and the real interest rate is positive, contrary to what is predicted by theory.
• D)The observed relationship between the investment share of GDP and the real interest rate is positive, as predicted by theory.
• E)The observed relationship between the investment share of GDP and the real interest rate is negative, contrary to what is predicted by theory.

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Definitions:

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, and other assets.

Schedule D

Schedule D is a tax form used to report capital gains or losses from the sale of capital assets, including stocks, bonds, and real estate.

Average Cost

A method of calculating the cost of inventories based on the average cost of all similar goods available during the period.

Adjusted Basis

The original cost of a property plus improvements, less any depreciation taken, used in calculating capital gains or losses for tax purposes.