If the Investment Curve Is Steep (I

question 124

Multiple Choice

If the investment curve is steep (i.e., investment is less sensitive to changes in the real interest rate) , then an increase in government spending by $100 billion will cause:

• A) a decrease in investments larger than $100 billion.
• B) a decrease in investments equal to $100 billion.
• C) an increase in investments equal to $100 billion.
• D) an increase in investments larger than $100 billion.

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