Investment Spending Is

question 30

Multiple Choice

Investment spending is

• A)much more volatile than consumption spending.
• B)equally volatile as GDP.
• C)less volatile than consumption spending.
• D)a larger fraction of GDP than consumption is.
• E)equally as volatile as government spending.

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Definitions:

Short-Run Production

The period in which at least one input or factor of production is fixed, allowing firms to adjust only certain inputs to change output levels.

Average Total Cost

The total cost of production (fixed and variable costs) divided by the total quantity of output produced.

Marginal Cost

The additional cost incurred in the production of one extra unit of a good or service.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced; these costs decline as production increases.