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:

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its total interest charges.

Estimated Liabilities

Obligations or debts that a company expects to incur but has not yet quantified with certainty.

Note Payable

A written agreement where one party promises to pay another party a definite sum of money at a certain date or on demand.

Interest Paid

The amount of money paid by a borrower to a lender in return for the use of borrowed money.