Consider Desired Investment in the Simple Macro Model

question 124

Multiple Choice

Consider desired investment in the simple macro model.Other things being equal,higher real interest rates tend to

• A)reduce every component of desired investment expenditure except residential housing.
• B)reduce every component of desired investment expenditure except inventories.
• C)reduce every component of desired investment expenditure except plant and equipment.
• D)increase every component of desired investment expenditure.
• E)reduce every component of desired investment expenditure.

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Definitions:

Planning Board

A governing body or committee responsible for setting policies, goals, and procedures related to urban planning, development, and infrastructure projects.

Private Ownership

The legal rights of individuals or corporations to own property and assets, excluding governmental entities.

Economic Growth

(1) An outward shift in the production possibilities curve that results from an increase in resource supplies or quality or an improvement in technology; (2) an increase of real output (gross domestic product) or real output per capita.

Self-Interest

is the motivation by individual personal gain as the driving force behind economic decisions and actions.