(Consider This) During the Great Recession of 2007-2009, Both Real

question 91

Multiple Choice

(Consider This) During the Great Recession of 2007-2009, both real interest rates and investment spending declined.This suggests that

• A)the investment demand curve was positively sloped during this period.
• B)purchases of capital from abroad increased, and these were not reflected in investment spending figures for that period.
• C)firms were optimistic about future sales.
• D)the investment demand curve shifted inward.Topic: Shifts of the Investment Demand Curve Topic: The Interest-Rate-Investment Relationship

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Definitions:

Federal Reserve Bank

The central banking system of the United States, established in 1913, which aims to provide the nation with a safer, more flexible, and stable monetary and financial system.

Economic Speculation

The practice of engaging in risky financial transactions in an attempt to profit from short or medium-term fluctuations in the market value of a tradable financial instrument.

Alan Greenspan

Former Chairman of the Federal Reserve of the United States, who served from 1987 to 2006 and played a key role in American monetary policy during that period.

Federal Reserve Bank

The Federal Reserve Bank is the central banking system of the United States, which oversees the nation's monetary policy and regulates its financial institutions.