The Number of Dollars of Investment Required to Produce an Extra

question 64

Multiple Choice

The number of dollars of investment required to produce an extra dollar of goods or services is called the

• A) multiplier.
• B) rate of innovation.
• C) marginal efficiency of investment.
• D) capital-output ratio.
• E) rate of return.

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Definitions:

Investment

Investment entails the allocation of resources, such as capital or time, into a venture with the expectation of generating income or profit over time.

Inflation Rate

The percentage increase in the general price level of goods and services in an economy over a period of time, typically measured annually.

Circular-Flow Diagram

A visual model of the economy that shows how dollars flow through markets among households and firms

GDP

The total worth of all goods and services produced within a country during a given time frame is defined as Gross Domestic Product, reflecting the nation's economic activity.