Autonomous Real Investment Spending Is

question 386

Multiple Choice

Autonomous real investment spending is

• A) the level of investment expenditure required to keep the economy expanding at its current growth rate.
• B) the level of investment expenditure that is independent of real GDP.
• C) the level of investment expenditure required to replace capital lost to depreciation.
• D) the level of investment expenditure that would prevail if interest rates were zero.

---

Definitions:

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount loaned, paid to the lender at regular intervals for the use of their money.

Bond Prices

The market value of a bond, which can fluctuate based on interest rates, the bond’s credit quality, and other factors.

Opportunity Cost

Cost associated with opportunities forgone when a firm’s resources are not put to their best alternative use.

Projected Net Present Value

An estimation of the present value of an investment's future net cash flows minus the initial investment cost.