Which of the Following Would Lower the Amount of Investment

question 147

Multiple Choice

Which of the following would lower the amount of investment crowded out by an increase in government purchases?

• A)A less interest-rate-sensitive exchange rate
• B)Imports becoming less exchange-rate sensitive
• C)A more interest-rate-sensitive exchange rate
• D)Government purchases becoming less interest-rate sensitive
• E)Exports becoming less exchange-rate sensitive

---

Definitions:

Consumer Savings

Refers to the portion of disposable income that is not spent on consumption but is saved by individuals, often placed in savings accounts or invested.

Business Investment

Expenditures made by businesses to purchase capital goods or services intended to increase their productive capacity or efficiency.

Financial Instruments

Contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Markets

Platforms or systems that facilitate the buying, selling, and trading of financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand.