Suppose That Autonomous Investment Level Is $100 Billion Per Year

question 51

Multiple Choice

Suppose that autonomous investment level is $100 billion per year.If income in the economy falls,

• A)the level of investment will increase
• B)the level of investment will decrease
• C)the quantity of investment demanded will increase
• D)the quantity of investment demanded will decrease
• E)investment spending will not change

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Definitions:

Short Run

A period in economics during which at least one input is fixed, limiting the immediate capacity to adjust production levels.

Monopolistic Competitive

A market structure characterized by many firms selling products that are similar but not identical, allowing for significant differentiation and some degree of market power.

Long Run

A period of time in which all factors of production and costs are variable, allowing companies to adjust all aspects of their operations.

Economic Profits

Economic profits are the financial gains that occur when the revenue from business activities exceeds the costs, expenses, and the opportunity costs of all resources employed.