In the Simple Macro Model,desired Investment Is Assumed to Be

question 65

Multiple Choice

In the simple macro model,desired investment is assumed to be autonomous with respect to national income.Which of the following will cause a shift of the investment function?
1) a decrease in interest rates
2) an increase in firms' optimism about the economy
3) an expectation of a downturn in future economic activity

• A)1 and 2
• B)2 and 3
• C)1 and 3
• D)1,2,and 3
• E)1 only

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Definitions:

Net Income

The income a company retains following the deduction of all expenses and taxes from its total revenue.

Interest Allowances

Financial incentives or reductions in interest payments designed to encourage borrowing or to alleviate the burden of interest costs.

Salary Allowances

Fixed amounts paid to employees in addition to their regular salary to cover specific needs or expenses, such as travel or living expenses.

Withdrawal

The act of removing funds from a bank account or the process of taking assets out of a business by its owner for personal use.