If Business Managers Become More Optimistic About Future Sales and Profits

question 11

Multiple Choice

If business managers become more optimistic about future sales and profits, then there will be

• A)a rightward movement along the autonomous investment function
• B)a leftward movement along the autonomous investment function
• C)an upward shift of the autonomous investment function
• D)a downward shift of the autonomous investment function
• E)no movement along or shift of the autonomous investment function

Understand the role of resources and capital in the production process.

Appreciate the necessity of economizing due to scarcity.

Recognize the implications of government spending and institutional constraints on economic outcomes.

Understand the basic concepts of production possibilities curves and opportunity costs.

---

Definitions:

Common Stock

Equities representing ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Equity Method

An accounting technique used to record investments in other companies, where the investment's value is adjusted to reflect the investor's share of the company's post-acquisition earnings or losses.

Gross Profit

The difference between revenue and the cost of goods sold, before deducting overheads, salaries, and other operating expenses.