The Simple Investment Function Shows That Investment ______ as ______

question 81

Multiple Choice

The simple investment function shows that investment ______ as ______ increases.

• A) decreases; the interest rate
• B) increases; the interest rate
• C) decreases; government spending
• D) increases; government spending

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Definitions:

Compound Interest

Interest earnings calculated on the base principal along with any interest that has previously accumulated from past periods on that principal.

Straight-Line Depreciation

A method of calculating the depreciation of an asset which spreads the cost evenly across the useful life of the asset.

Average Rate of Return on Investment

An investment's return expressed as an annualized percentage, calculating how much an investment has gained compared to its initial cost.

Compound Interest

The interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan.