The Investment Schedule Shows the

question 187

Multiple Choice

The investment schedule shows the

• A)inverse relationship between the expected rate of return and the quantity of investment demanded.
• B)positive relationship between the expected rate of return and the quantity of investment demanded.
• C)amounts business firms collectively intend to invest at each possible level of GDP.
• D)rate of interest that business firms must pay when they make investments in capital goods.

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Definitions:

Inferior Good

A type of good for which demand decreases as the consumer's income rises, reversing the typical behavior observed with normal goods.

Long-run Equilibrium

A state in which economic forces such as supply and demand are balanced and in the context of production, firms are operating at an efficient scale.

Decreasing-cost Industry

An industry in which production costs fall as the industry expands, often due to economies of scale or technological improvements.

Long-run Equilibrium Prices

The price at which the quantity supplied equals the quantity demanded, stabilized over a longer period, factoring in all market adjustments and resource mobility.