In the Third Quarter of 2008, Investment in the U

question 18

Multiple Choice

In the third quarter of 2008, investment in the U.S. totaled $1.4 trillion and in 2007, investment was
$1) 3 trillion. The change in investment

• A) is a change in induced expenditure.
• B) will increase the multiplier.
• C) is a change in equilibrium expenditure.
• D) is a change in autonomous expenditure.

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Definitions:

Price Skimming

A pricing strategy where a firm charges the highest initial price that customers will pay and lowers it over time as demand at the higher price is satisfied.

Maximizing Profits

The process or strategy of adjusting the operations, pricing, and production of a business to generate the highest possible profit margins.

Development Costs

Costs incurred in the design and development phase of a project, often relating to the creation of new products or services.

Variable Costs

Expenses that change in proportion to the level of production or business activity.