Equilibrium Output Will Rise and the Equilibrium Interest Rate Will

question 72

Multiple Choice

Equilibrium output will rise and the equilibrium interest rate will fall if

• A) government spending increases.
• B) the money supply increases.
• C) exports increase.
• D) all of the above.

---

Definitions:

Sensitivity Analysis

The process of analyzing the impact of varying key assumptions or input variables on the outcome of a decision or model.

Annual Net Cash Flow

The difference between a company's total cash inflows and outflows over one fiscal year, reflecting its ability to generate cash.

Average Rate Of Return

A method of evaluating a capital investment proposal that focuses on the expected profitability of the investment; computed as average annual income divided by average investment. Also referred to as accounting rate of return.

Average Income

The mean amount of earnings generated over a specified period of time, taking into account all revenue sources.