Even Though Investment Spending Is a Smaller Part of Aggregate

question 24

Multiple Choice

Even though investment spending is a smaller part of aggregate demand than consumption, it is much more

• A)sluggish in movement or response.
• B)short run in nature.
• C)volatile.
• D)independent of business fluctuations.

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Definitions:

Interest Rate

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid to the lender.

MB = MC Rule

A principle in economics that states the optimal level of an activity is reached when the marginal benefit (MB) is equal to the marginal cost (MC).

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the total amount loaned, which can influence economic activity and monetary policy.

Land Rent

The price paid for the use of land or real estate, often determined by its location, size, and utility.