An Increase in Public Works Spending Is Likely to

question 37

Multiple Choice

An increase in public works spending is likely to

• A)Increase physical capital investment.
• B)Decrease physical capital investment.
• C)Have no effect on physical capital investment.
• D)Increase or decrease physical capital investment,depending on magnitude.

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Definitions:

Eurobonds

International bonds issued in a currency not native to the country where it is issued, allowing companies to raise capital in a foreign currency.

Bearer Form

A method of issuing securities whereby the certificate does not record the owner's name, making possession of the physical certificate equivalent to ownership of the security.

Income Taxes

Taxes imposed by the government directly on income, both earned (salaries, wages, commissions) and unearned (interest, dividends).

Indirect Quote

A foreign exchange rate quotation that specifies the foreign currency amount that can be purchased with one unit of the domestic currency.