In the Short-Run Macro Model,planned Investment Is Defined as

question 70

Multiple Choice

In the short-run macro model,planned investment is defined as

• A) plant and equipment purchases by business firms plus inventory changes
• B) plant and equipment purchases by business firms plus new home construction
• C) plant and equipment purchases by business firms
• D) new home construction plus inventory changes
• E) inventory changes

---

Definitions:

Short Run

Describes a period in which some factors of production or inputs are fixed, limiting the ability of a business to fully adjust to market changes.

Long Run

A period in which all factors of production and costs are variable, and firms can adjust all inputs.

Inputs Fixed

Refers to factors of production (like capital and land) that remain constant in quantity, regardless of the level of output.

Inputs Variable

Factors of production such as labor, land, and capital that are used to create goods and services.