Which of the Following Statements Represents a Correct and Sequentially

question 27

Multiple Choice

Which of the following statements represents a correct and sequentially accurate economic explanation?

• A) The (U.S.)dollar appreciates,net exports rise,total expenditures on goods and services rises,AD rises,and the AD curve shifts rightward.
• B) The interest rate falls,investment rises,total expenditures on goods and services rises,AD falls,and the AD curve shifts leftward.
• C) Wealth increases,consumption rises,total expenditures on goods and services rises,AD falls,and the AD curve shifts rightward.
• D) (Business)expectations about future sales become more positive,investment rises,total expenditures on goods and services rises,AD rises,and the AD curve shifts rightward.
• E) Foreign real national income rises,net exports rise,total expenditures on goods and services falls,AD rises,and the AD curve shifts rightward.

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Definitions:

Reinvestment Problem

The challenge of effectively reinvesting earnings or capital gains to achieve additional growth or income.

Multiple Solutions

Situations where more than one answer or approach can satisfy the conditions of a problem.

MIRR

Modified Internal Rate of Return, a financial measure used to evaluate the attractiveness of investments, taking into account the cost of capital and the reinvestment rate.

Cost of Capital

A minimum profit rate a business has to achieve on its ventures to sustain its market price and appeal to investors.