Let I = E - DR Represent an Investment Function

question 35

Multiple Choice

Let I = e - dR represent an investment function. The coefficient d

• A) should always be positive and larger in magnitude if a 1-point increase in R causes a relatively large change in investment.
• B) should always be negative and larger in magnitude if a 1-point increase in R causes a relatively large change in investment.
• C) should always be positive and smaller in magnitude if a 1-point increase in R causes a relatively large change in investment.
• D) should always be negative and smaller in magnitude if a 1-point increase in R causes a relatively large change in investment.
• E) can have either sign depending on circumstance.

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