Which of the Following Illustrates How the Investment Accelerator Works

question 32

Multiple Choice

Which of the following illustrates how the investment accelerator works?

• A)An increase in government expenditures increases the interest rate so that the Burgerville chain of restaurants decides to build fewer new restaurants.
• B)An increase in government expenditures increases aggregate spending so that Burgerville finds it profitable to build more new restaurants.
• C)An increase in government expenditures increases the interest rate so that the demand for stocks and bonds issued by Burgerville increases.
• D)An increase in government expenditures decreases the interest rate so that Burgerville decides to build more new restaurants.

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Definitions:

Normal Curve

A bell-shaped curve that represents the distribution of many types of data where most values cluster around a mean value.

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of numerical data from its mean.

Bar Graph

A visual representation of data using bars of different heights or lengths to compare values across categories.

Correlational Measures

Statistical methods used to determine the relationship or association between two variables without inferring cause and effect.