Which of the Following Statements Is True

question 12

Multiple Choice

Which of the following statements is true?

• A) A change in sales should have more impact on current investment if it is expected to be permanent rather than temporary.
• B) Investment and consumption contribute equally to output fluctuations.
• C) On a percentage basis, investment is more volatile than consumption.
• D) All of the above.
• E) None of the above.

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Definitions:

Discounted Present Value

The current worth of a future sum of money or stream of cash flow given a specified rate of return.

Additional Paid-In Capital

Capital received from investors for shares, exceeding the par value of the shares, often reflecting the premium paid over nominal value.

Market Value

The ongoing pricing level at which a service or asset is offered for buying or selling in the market environment.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.