Which of the Following Is True Regarding Investment

question 65

Multiple Choice

Which of the following is true regarding investment?

• A) In the short run it increases aggregate supply but in the long run it increases aggregate demand.
• B) In the short run it influences aggregate demand and in the long run it influences the rate at which the economy grows.
• C) In the short run it influences aggregate demand but in the long run it retards economic growth since it requires saving.
• D) In the short run it reduces aggregate demand because it requires savings but in the long it promotes economic growth.

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Definitions:

Interest-bearing Note

A debt instrument that requires the issuer to pay the lender interest over the life of the note, in addition to repaying the principal amount at maturity.

Maturity Value

The total amount due to the owner of an investment at the end of its term, including principal and interest.

Notes Receivable

A claim against a debtor for an uncollected amount, typically evidenced by a formal instrument of credit.

Face Value

The nominal value printed on a bond, note, or other financial instrument, representing its value at maturity.